Air Line Pilots Association International v. US Airways Group, Inc. et al

Filing 42

MEMORANDUM OPINION re Defendants' Motion to Dismiss. Signed by District Judge Claude M. Hilton on 8/25/2009. (rban, )

FOR THE EASTERN DISTRICT OF VIRGIl^A
Alexandria Division
'J'

IN THE

UNITED

STATES

DISTRICT

COURT

fljg 25 2009
/':; >..- -

GU

..

·

;

.

v>T»RT
·'

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,
Plaintiff,

) )

)
)

V.

)

Civil Action No.

l:09cv222

U.S.

AIRWAYS GROUP,

INC.,

) )

et aJU,

Defendants.

)
)

)

MEMORANDUM OPINION

This case Group, Inc.

is before

the Court on Defendants' Inc.

US Airways Joint

{"Group")

and US Airways,

("Airways"),

Motion to Dismiss,
("Piedmont")

and Defendants'
Inc. P.

Piedmont Airlines,
("PSA")

Inc.

and PSA Airlines, to Fed. R.

Joint Motion To

Dismiss pursuant

Civ.

12(b)(6). ("ALPA"), which

Plaintiff Air Line represents pilots at

Pilots Association Inc.

PSA Airlines,

("PSA")

and Piedmont

Airlines,
Group,

Inc.

("Piedmont"),

filed a two-count

lawsuit against

as well as against

its wholly-owned air carrier

subsidiaries,

Airways,

PSA,

and Piedmont,

seeking injunctive and

declaratory relief. Count One of the Complaint alleges that the Railway Labor

Act

(the

"RLA"),
as well

45 U.S.C.
as

§§

151-188,

requires Group and
to create a multi-carrier

Airways,

PSA and Piedmont,

board of pilots

adjustment

to hear

the grievances

of

PSA and Piedmont

related

to alleged flow-through rights.

Count Two of its

the

Complaint alleges

that Group has breached over its

contractual commitments

to arbitrate disputes

contractual undertakings.

Defendant Group Airways,
are 45

is a holding company that owns Defendants Defendants Airways, PSA and Piedmont
the RLA. at all

PSA and Piedmont.

each carriers by air, U.S.C. § 181.

as defined in Section 201 of

ALPA had previously represented pilots but on April 18, 2008, the US Airline

three

carriers,

Pilots

Association pilots

("USAPA")

displaced ALPA as

the

union representing to represent pilots

employed by Airways.
Piedmont.

ALPA continues

employed by PSA and

Group,

Airways

and ALPA,

on behalf of

the Airways pilots, in which Group and

entered into a letter of

agreement in 2002

Airways

sought cost-cutting concessions

from the Airways pilots

(the

"2002 Restructuring Agreement"),

though they subsequently
As the preamble to the "made and and US

had to file for bankruptcy protection. 2002 Restructuring Agreement states, entered into ... the

agreement was

by and between US Airways Group,

Inc.

Airways,

Inc.

.

.

.

and the Airline Pilots

in the service of US

Airways,
2002

Inc.

as represented by" ALPA.
were Group,

The signatories to the
Airways, and ALPA.

Restructuring Agreement

The 2002 Restructuring Agreement references potential

"Flows

-2-

between Carriers,"

providing,

in part,

that

w[f]ollowing the

recall of all

furloughed US Airways pilots,
[PWOC]

pilots employed by a
shall be eligible to

[Participating Wholly-Owned Carrier]

flow through to any new-hire US Airways pilot positions of their seniority position on the . . integrated . ." It

in order of

seniority list further provides

pilots

of Wholly-Owned Carriers

that

" [p]ilots
Inc.]

employed by a
pilots

[PWOC]

who become MDA

[Mid-Atlantic

Airways, B,

or US Airways pilots under [PWOC].

this Attachment

may flow back to if

their respective furloughed . . .,

US Airways pilots into positions the
are "to

employed by MDA, at [PWOC]

may displace . . .
for

in order of

their seniority
that

."

However,
"flow"

Agreement also

indicates

procedures

such

be

discussed."

There

is no

allegation that

such discussions

have

ever been concluded.

Airways

and ALPA entered

into another

letter of

agreement,

Letter of Agreement
"Consolidated Small

91

("LOA 91"),

in May 2004,
Unlike the

entitled
2002

Jet Agreement."

Restructuring Agreement,
LOA 91. As the preamble

however,
to LOA 91

Group was
states,

not a signatory to
the agreement was made

"by and between US Airways,

Inc.

(hereinafter referred to as

the

'Company')
Airways,

.

.

.
as

and the Airline
represented by"
not by Group.

Pilots in the service of US
ALPA. LOA 91 was signed by ALPA

Inc.

and Airways,

but

LOA

91

also contains a provision

labeled

"Flows

between

-3--

Carriers,"

that

states,

in part,

that

"flow"

would occur (LOA

"in

accordance with the #_tbd There
upon.

Flow Through Letter of Agreement Company and

)

to be agreed to by the that

the Association." ever been agreed

is no allegation

any such letter has

In 2002,

Piedmont

and its pilots,

represented by ALPA, for cost-cutting

also

entered into a restructuring agreement

concessions Agreement").
refers to

from the Piedmont pilots Section D of the

(the

"Piedmont Restructuring

Piedmont Restructuring Agreement
to "flow through to US signatories to the

"entitling Piedmont pilots" Yet,

Airways."

only ALPA and Piedmont were

Piedmont Restructuring Agreement.

The arbitration decision cited by ALPA in its Complaint "Wittenberg Award")
Agreement. The

(the

interpreted the Piedmont Restructuring

issue presented in the Wittenberg Award was

"whether Piedmont
D of

.

.

.

violated the Agreement,

including Section
regional

the Restructuring Agreement by failing

to provide

jets

for the airline."

The Wittenberg Award found that
[which merged with

"[t]he

record establishes

that the Allegheny

Piedmont]

pilots understood that the language in D.I was not an
jets . . . because the

enforceable commitment for regional

guarantee could only be delivered on by Airways,

not Allegheny.

The

[Piedmont]

Restructuring Agreement could not bring the
the only party capable of

guarantees

sought by the pilots because

-4-

delivering

the

jets

was

not a

signatory to that Agreement."

The

Wittenberg Award denied ALPA's

grievance.

It also found that

"[d]espite being a wholly-owned subsidiary,
independently operated airline." In 2 002,

Piedmont

is an

PSA and ALPA entered into a letter of

agreement,

entitled

"Small Jet Aircraft and Cost Reductions"
"by and between PSA Airlines,
of PSA Airlines, Inc. as

("LOA 3").
. . . and the

That agreement,
pilots ALPA,
not

Inc.

in the was

service

represented by" The agreement does
that

accordingly signed by PSA and ALPA.
reference LOA 3, "flow-through," PSA became a

specifically

but ALPA alleges

upon ratification of

PWOC.

In 2004,

PSA and ALPA entered into another

letter of

agreement, LOA 3,
service

entitled

"Regional Jet Aircraft"

("LOA 8").

As with in the
PSA and

this agreement was between PSA and
of PSA Airlines, Inc. as

"the pilots
ALPA.

represented by"

ALPA were again the only signatories

to this

agreement.

The

agreement contains a dispute resolution procedure,
limited Group, to paragraphs PSA and ALPA as Group, four through eight the parties was of LOA 8

which is
and which in dispute the lists

to participate

resolution.
agreement.

however,

not a

signatory to

On August
a letter

22,

2007,
and

ALPA,

on behalf
The

of

Piedmont pilots,

sent
to

to Airways

Piedmont.

letter,

which purported

be a contract grievance,

complained of

"failure

...

to honor

-5-

the

'flow-through'

rights"

of

Piedmont pilots. that "there is

Airways

responded for

on September 4, Piedmont pilots

2007, to

stating

no mechanism

file a grievance

against US Airways,

as US

Airways

is neither their employer nor a party to any collective
the Piedmont pilots." Piedmont

bargaining agreement with

responded on September 21, to

2007,

stating that no agreement on how

implement flow-through had been reached between the ALPA

groups

(Airways ALPA,

Piedmont ALPA,

and PSA ALPA)

or between

Airways and ALPA,

and therefore,

the grievance was denied. First, on October 12, requesting the
jurisdiction

ALPA in turn responded 2007, ALPA sent a
a

in two ways.

letter to Piedmont and Airways
Board of Adjustment" with

creation of

"Special

over Piedmont,

Airways,

and PSA.

Second,

ALPA invoked the

jurisdiction of
hear

the Piedmont/ALPA System Board of Adjustment to

the dispute.

ALPA made its

first 19,

submission to the Piedmont Board of 2007, and identified the issues for

Adjustment on October

resolution as whether Piedmont had failed to Airways, Inc. compl[ies]

(1)

"ensure that US

with its obligation to offer
... as set forth in Section and (2) in

flow-through to D.3. of the 2002

the pilot group [Piedmont]

Restructuring Agreement";

"ensure"
order of

that Airways
seniority

comply with flow-through obligations
'Small

"as provided for by the

Jets Agreement'

in Attachment B,

page

9

of

the 2002 Restructuring Agreement."

-6-

This

submission did not present any question as actions, but was
26, 2007,

to Airways' actions.

or

Groups'

limited

to Piedmont's
its

On October Piedmont

ALPA amended

submission to the following question:

Board of Adjustment by adding the

"[a]re US Airways and dispute, and, if so,

its new-hired pilots

involved in this this
to

should they be given notice of

proceeding and invited to participate as non-voting parties this adjustment proceeding?" ALPA also added

to the question of

remedy whether an appropriate
give

remedy would include

"the remedy to

this Board or an expanded board jurisdiction over US Airways

and its pilots."
however,

There

is

no allegation

in the Complaint,
to the Piedmont

that ALPA ever processed the grievance

Board of Adjustment
rights and its

for hearing of

its

claim for

flow-through

requested remedy. on March 2, the 2008, ALPA sent a letter to Airways that the ALPA-PSA and LOA 8, Again,

Similarly,

and PSA on behalf of

PSA pilots as

asserting

collective bargaining agreement, created enforceable

amended by LOA 3 for

flow-through rights

PSA pilots.

there

is no allegation in the
to the

Complaint

that ALPA processed this
for hearing of its

grievance claim.

PSA Board of Adjustment

On January PSA, Piedmont

12,

2009,

ALPA sent

a

letter

to Group, about the

Airways, alleged

and USAPA

regarding grievances

flow-through rights of

Piedmont and PSA pilots under the various

-7-

collective bargaining agreements.
negotiations on stated that it flow-through rights "remains

In it,

ALPA conceded that
been completed and

had not

interested in completing negotiations

that will protect the rights of

the US Airways pilots to as well as the rights of but the those

flow-through to Piedmont and PSA, Piedmont and PSA pilots to

flow-through to US Airways,

negotiations have gone
completely stalled."

forward at a snail's pace and are now
The letter clarified that ALPA expected to

"continue and complete negotiations of
agreement . . . ."

the

flow through

ALPA included a proposal regarding flow-through rights with
its January 12, 2009 letter, and expressed the hope that this

proposal would be the basis
Among other things,

for swift completion of negotiations.

ALPA proposed a multi-carrier board of

adjustment with jurisdiction over disputes
flow-through rights

relating to

and described the proposed board's

jurisdiction,
proposal,

composition,

and procedures

in detail.

Echoing its

ALPA also requested in its

letter the creation of a

board of adjustment made up of each carrier,
with a neutral

"a pilot and a representative from from US Airways Group," along

and a representative
arbitrator.

Airways responded on January 14,
the

2009,

explaining that while
the grievance

Piedmont and PSA pilots may be able

to invoke

and arbitration process

set forth in the applicable ALPA

-8-

collective bargaining agreements

to pursue claims against the there is no basis for pilots

carriers by which they are employed, from those airlines Airways,

to file any sort of grievances against US

nor is there any basis for the group board of adjustment
In response to ALPA's attached proposal,
this new proposal "appears to be

requested.
noted that

Airways

an ALPA proposal only

and as

far as we know is not reflective of a Union flow through

proposal presented on behalf of all three pilot groups recognized that it might take some time for the
parties to reach consensus on a proposal

.... union

We

.

.

.

to present

to the

Company parties

for consideration

....

We would like to

conclude these talks and finalize an agreement regarding the flow-through processes to be implemented at these airlines.

However,

such an agreement would need to be reached with all

applicable parties."

Count One asks
204 of the RLA as

the Court

to

interpret Sections

2,

First and

requiring

the Defendants

to establish a

multi-carrier board of
its

adjustment with jurisdiction over Group,
and USAPA. See 45 U.S.C. §§ 152,

three carrier subsidiaries,

First,
Where

184.

ALPA's

interpretation of
to mandate

those

sections

is wrong.
the

Congress

sought

a multi-carrier board under

RLA,
the

it did so explicitly.
creation of a national,

Section 3,

First of

the RLA requires
adjustment for

multi-carrier board of

the

railroad

industry.

45

U.S.C.

§

153,

First.

In contrast,

-9-

Section 204 "shall"

provides

that air carriers and their employees but "may" create further

establish adjustment boards, 45 U.S.C. §

multi-carrier boards. affirms

184.

Section 204

that such multi-carrier boards are The plain text of the statute

to be created by forecloses ALPA's

agreement.

allegation that Group and Airways

are statutorily obligated to

create a multi-carrier board,
operation of

and that

such a board is created by
Basic principles of theory that the

law rather than consent.

statutory interpretation also preclude ALPA's

general dispute-settlement
displace scope of the specific

language

in Section 2,

First

should

language

in Section 204.

Whatever the ALPA

Section 2,

First,

it offers ALPA no relief here.

litigates on behalf

of

individuals who undisputedly are not
and it is well-settled that Section

employed by Airways or Group,

2,
own

First governs only the relationship between carriers and their
employees.

The Complaint quotes Section 204

at

length,

but

ignores

the

import of that text.
mandates

In contrast to Section 3,
a national,

First,

which

the establishment of

multi-carrier board of

adjustment

for carriers by rail called the National Railroad ("NRAB"), 45 U.S.C. § 153, First the RLA
that

Adjustment Board

expressly excludes section, 45 U.S.C.

air carriers § 181,

from the coverage of

and adopts an altogether different industry. Section 204, the provision of

approach for the

airline

-10-

the RLA specifically governing the creation of boards of
adjustment employees does not in the airline industry, compels a carrier and but its

to establish a board of

adjustment,

unequivocally § 184.

require a multi-carrier board.

45 U.S.C.

Section 204
carrier and of
adjustment . .

states

that

" [i]t shall be
...
§

the duty of every

its
. ."

employees
45 U.S.C.

to establish a board of
By contrast, it explicitly

184.

leaves

it

to the parties

to negotiate over the board's

scope:

"[s]uch boards of adjustment may be established by agreement between employees and carriers or system, or group of either on any individual carrier,

carriers by air and any class or classes

of

its or their employees
thus mandates
the decision of

.

.

.

."

Id.

The express

text of

Section 204
but leaves

the creation of a board of adjustment,
whether to create a multi-carrier

board

to the parties'

negotiation and consent.

Settled principles

of

statutory interpretation require the section's words. "shall" When

adherence to the plain meaning of Congress carefully contrasts "may" in the same the

imperative

with the

permissive

statutory provision,

the plain

meaning of those words ordinarily must be given effect. United States ex rel. Siegel v. Thoman. 156 U.S. 353,

See

359-360

(1995)

(construing clauses of a Louisiana state statute,
that "[i]n the first 'may,' the word is used, 'shall' and in the

explaining

latter provision the word

indicating command in

-11-

the

one

and permission

in

the

other,"

and

concluding

that

when

"[i]n the
special

law to be

construed

.

.

.

the word

'may'
. .

is used in
. there can be

contradistinction

to the word

'shall,'

no reason for
the statute);

'taking
see

.

.

.

liberty'"
Davis,

with the plain meaning of
531 U.S. 230, 241 (2001)

also Lopez v.

("Congress'
legislators' section.").

use of
use of The

the permissive
a mandatory of a

'may'

.

.

.

contrasts with the
same air carriers of

'shall'

in the very is clear:

import have

these phrases statutory duty

and their employees

to establish boards

adjustment,

but

if

they wish to create
of adjustment,

(and bear the expense of)
contract to do so.

multi-carrier boards

they must

Section 204
only employs boards,

makes

this

conclusion
"may"

inescapable because

it not

the permissive

in authorizing multi-carrier the means by which the

but also expressly

identifies

scope of 184. "may"

a board

is

to be determined: the "by agreement" clear:

"agreement." language

45 U.S.C.

§ the

In so doing,

confirms what

wording already makes are creatures of of

multi-carrier boards of to be created "by the

adjustment agreement"

contract,

the carrier and its employees.

Count One of

Complaint cannot
Count One of

survive

the plain reading of Section 204's
is left to rely on

text.

the Complaint

Section 2,

First's
246, 255

"general duties,"
n. 5 (1994),

Hawaiian Airlines v.
include the general

Norris.

512 U.S.
all

which

"duty of

carriers,

their officers,

agents,

and employees

to exert every

-12-

reasonable

effort

...

to

settle

all

disputes

.

.

.

."

45

U.S.C.

§

152,

First.

ALPA's

theory appears

to be

that

this

general dispute-settlement

language

can be understood to compel

multi-carrier boards of

adjustment when such a board might be

useful
one by

to settle a dispute.
"reasonable effort"

ALPA alleges
to

in its Complaint
disputes"

that

such

"settle all

commanded

the RLA is Defendants'

establishment and utilization of jurisdiction to resolve ALPA's

adjustment boards with
allegations.

sufficient

ALPA's Section 2, duties Section

theory would be plausible only if one First in isolation. First is ALPA's reading of

were

to read

the general of

in Section 2, 2 04 dealing But

inconsistent with the provisions the scope of boards of United

specifically with

adjustment. States v.

"[s]tatutes must

be read as 128,

a whole," 135 (2007)

Atl.

Research Corp..

551 U.S.

(citation

and internal quotation marks omitted).
of . . statutory construction that . ." Morales v. See also F.3d 334,

And

"it is a commonplace
governs 504 the general U.S. 374, 384

the specific

Trans World Airlines. Pressley v. 339 Tupperware 2009). 2,

Inc..

(1992). Plan. 553

Long Term Disability

(4th Cir.

ALPA's

interpretation of

Section

First,

as mandating Section

multi-carrier boards,
204 in two ways. It

conflicts with the plain meaning of
conflicts with Section 204's "may"

language:

there would be no reason

for Section 204

to

say that carriers and

-13-

their

employees 2,

"may"

contract to

for multi-carrier boards they *must.' ALPA's

if

Section

First were

say that

interpretation would rob

the

"may"

language of

any effect,

undoing Congress's careful distinction between
in Section 204. 45 U.S.C. § 184.

"may"

and

"shall"

ALPA's
agreement"

interpretation would undermine
clause, because it would lead to

Section 204's
the

"by

creation of

multi-carrier boards by statutory mandate agreement. In fact, ALPA's

rather than by Section 2, First

construction of the

would altogether practical matter.

eviscerate

"by agreement" are

language as a

Multi-carrier boards a multi-carrier

only worth requesting Moreover, a

when a claimant has

complaint.

complainant

can almost

always argue

that a single-carrier board its own employees -

having jurisdiction over only the carrier and

is unable

to fully resolve a multi-carrier dispute. Section 2, First,

Hence,

under

ALPA's construction of
to negotiate

a party that chose not

for a multi-carrier board could nonetheless obtain

one under the RLA multi-carrier boards

despite
are

the RLA's unequivocal
created would be

language that
Under the to expend "by

to be there

"by agreement." little reason

regime proposed by ALPA, the resources necessary

to bargain
ignored.

for one,
Id.

and Section 204's

agreement"
Given

phrase
the

would be

conflict

between Section

204's

plain meaning

and

ALPA's proposed

interpretation of

Section 2,

First,

the

specific

-14-

provisions of
language of be

Section 2 04

must prevail even if

the general
could plausibly law is
a

Section 2,

First,

read in isolation,

interpreted in the manner ALPA prefers.
[h]owever inclusive may be the general

"[T]he

settled

that

language of

statute,

it will not be held to apply to a matter specifically the same in the enactment .... Specific

dealt with in another part of terms prevail over the general
be

same or another statute
Fourco Glass Co. v.

which otherwise might

controlling."

Transmirra Prods.
and

Corp.,

353

U.S.

222,

228-229

(1957)

(citation

internal quotation marks

omitted);

see also HCSC-Laundry v.

United States.

450

U.S.

1,

6

(1981)

(per curiam)

("[I]t

is a statute

basic principle of . . .

statutory construction that a specific . . .,

controls over a general provision

particularly when

the two are interrelated and closely positioned v. Employment Sec.
"basic

.

.

.

.");

Farmer

Comm'n.

4

F.3d 1274,

1284

(4th Cir.

1993)

(citing the

principle of

statutory construction that when

two statutes are
applicable over a more to the

in conflict,
substance of

a specific
the

statute closely
hand controls

controversy at

generalized provision.").

Section 2,

First

is

merely a

"broad directive"

-

it

says not

a word about adjustment boards of
one

-

and the more over
S.

specific [the]
Ct.

language

Section 204 must be
. . . ." Corlev v.

"given precedence
United States.

more general
1568

129

1558,

(2009)

(citation and internal quotation marks

omitted).

ALPA's

-15-

attempt 204's

to substitute Section 2,

First's generalities

for Section

specific provisions must

fail.

Even if ALPA were allowed to ignore the

text of Section 204,

or displace it with the general language in Section 2,
Complaint would fail. Section 2,

First,

the

First governs only the and the

relationship between a carrier and its own employees,

duties and rights created extend only to those parties.
ALPA litigates
are

Because
who

solely on behalf of

Piedmont and PSA pilots,
or Group, it has no

concededly not

employed by Airways

Section 2,

First cause of

action against Airways or Group.

Section 2,

First duties do not extend to individuals who are
See Virginian Ry.
{Section 2,

not employed by the carrier.
No. 40. 300 U.S. 515, 548

Co.

v.
"at

Svs.
least

Fed'n

(1937)

First

requires the employer to meet and confer with the authorized representative of its
to make reasonable

employees,

to listen to their complaints,
in short,

effort[s]

to compose differences for the settlement of

to enter into a negotiation

labor disputes

.

.

.

.").

This

is

indicated by the text of
"carriers, to the

the provision,
agents, and

which

speaks of the duty of employees,"
and the

their officers,

and refers

"dispute[s]
45 U.S.C. §

between the carriers
152, First. indicates that

employees the

thereof."

Moreover,

structure of Section 2,

First

it

is not only limited to a carrier's employees,

but

that

it is

particularly focused on the relationship between the carrier and

-16-

the

representative of
Inc., No. 04

its
CV

employees.
1376, 03 CV

See Marcoux v.
4987, 04 CV

American
2008 U.S.

Airlines.

634,

Dist. 152,

LEXIS First

55751, is

at

*55-57

(E.D.N.Y.

July 22,

2008)

("Section

directed at

the employer's relationship with the

employees'

certified representative.").
not claim to represent Airways
As such,

ALPA does
not purport to

employees,

and does
of

represent

USAPA.

ALPA has

no cause

action against Group or Airways pursuant Although, the RLA does not compel

to

Section 2,

First.

the creation of
"carrier" and its

multi-carrier boards,

it does require every

employees

to establish a board of

adjustment.

45

U.S.C.

§

184.

Airways
is

is a carrier by air within the meaning of

the Act,

and it

therefore required to set up a board of adjustment. indeed established a system board for does not allege

But,

Airways has

its own

employees and the Complaint failed to make all

that Airways has

reasonable efforts
Accordingly,

toward settling disputes
Count One fails to state a

with its own employees.

claim upon which relief might be granted against Airways.
In contrast to Airways, Group is not a carrier at all and

ALPA does not allege otherwise.
that Group acted as and is, therefore,
on the text

ALPA's

allegation,
of its

instead,

is

the

"bargaining agent" 2,

subsidiaries, ALPA
not only

bound by Sections
of Section 2,

First and 204.
which requires

relies

First,

carriers,

but also

their agents

to exert

every reasonable

effort

-17-

to

settle all Assuming

disputes.

45

U.S.C. of

§

152,

First.

for purposes

this Rule

12 motion that ALPA's

allegation that Group acted as true, ALPA's

the

"agent"

of

its

subsidiaries

is

theory fails as a matter of
rule in in Section 2, Section 204.

law.

The general
not derogate the establishes not 2, First does that

dispute-settlement specific provisions

First

does

Section 204

multi-carrier boards statutory mandate. not alter this

are

the product of negotiation, language As such, in Section

The general rule.

specific

neither an agent's a

nor a

carrier's

Section 2,

First duties

include

statutory obligation

to establish a multi-carrier board.
The RLA's text makes clear that, whatever the scope of an

agent's are not

Section 2, included.

First duties, Section 204

the provisions of Section 204

requires only carriers and their and does not include

employees agents

to establish adjustment boards, Congress

in its dictates.

knew how to place

agents within

a statutory provision when it wanted to 2, First - and thus its

as evidenced by Section from Section

decision to exclude agents
Nelson v.

204's

command must be

respected.

Piedmont Aviation.

Inc..

750

F.2d 1234,

1236

(4th Cir.

1984)

("The presence of

this

section demonstrates
employees when
merit to ALPA's to

Congress'
. . .

ability to cover prospective
."). Accordingly, there is no
by the

it wishes

allegation

that

Group breached Section 204 Group does

failing

create

a multi-carrier board;

not have

-18-

obligation of ALPA's

establishing an adjustment board of "bargaining agent" theory

any kind. as a matter

statutory

fails

of
was

law for a more basic

reason:
and

the alleged agency relationship
thus Group's Section 2, First

limited to bargaining,

duties would process.

likewise have been limited

to the bargaining Group as the

Although the

Complaint variously casts

"bargaining agent," subsidiaries,
acted as its

and also more generally as allegation of

the

"agent"

of

its

the only factual
subsidiaries'

agency is
("Group

that Group
is also an

"bargaining"

agent,

agent of

each of

the Group Subsidiaries,

authorized to And under
First duties

contractually bind each of
ALPA's "bargaining agent"

the Group Subsidiaries.").
theory, Group's Section 2,

are necessarily limited to the bargaining process;
one purpose is not necessarily an agent for all

an agent

for

purposes.

Because a bargaining agent has no
duty under the RLA to assist disputes, ALPA's claim fails in the

lingering post-bargaining
subsequent ALPA altogether

settling of law:

as a matter of

fails the

to allege that Group

fell

short of Section 2,

First during

agency relationship,
of its

say,

by thwarting the

collective
failing to

bargaining process make reasonable

subsidiaries, that

or otherwise collective

efforts

to ensure

bargaining

agreements were put
alleges that the

in place.

In fact,
did enter

ALPA affirmatively
into collective

subsidiaries

bargaining agreements.

As

the Complaint

itself

establishes,

-19-

Group more might

than fulfilled whatever Section 2, "bargaining agent."

First duties

it

have had as

In Count Two of

the

Complaint, commitments

ALPA alleges

that Group has over to

breached its contractual its

to arbitrate disputes regard, ALPA appears
the 2002

contractual undertakings.
two separate theories.

In this

allege

ALPA alleges

that

Restructuring Agreement First and Section 204 of

incorporates the RLA,

the duties

in Section 2,

and that by signing the
itself to those statutory

agreement Group contractually bound

provisions.

And those provisions, arising

according

to ALPA,

require ALPA

Group to arbitrate disputes
also alleges that Group

from the agreement.
the terms of

is obligated by

LOA 8 2002

between PSA and ALPA to arbitrate disputes Restructuring Agreement, ALPA alleges as

arising from the

amended by LOA 91. is required to create a

that Group

multi-carrier board of
the 2002

adjustment because

it was a signatory to
that Group is so

Restructuring Agreement. the 2002

ALPA contends

required because Airways'

Restructuring Agreement First

incorporated 204 to

obligation under RLA Section 2,

and Section disputes

establish an arbitral growing out of
Agreement.

adjustment board to resolve

the

interpretation or application of

the Small

Jet

This

allegation

fails because

it

only gets ALPA as

far as

Sections

2,

First

and 204.

These

sections

do not

require

the

-20-

establishment of

a multi-carrier board of

adjustment.

Although

Section 204 provides establish a board of

that a carrier and its employees shall adjustment, it explicitly states that the

parties may contract for a multi-carrier board.

Thus,

setting

aside whether the contract actually incorporates any RLA
obligations, ALPA's allegation fails because it is based on the

flawed premise

that

the RLA requires creation of a multi-carrier which it clearly does not. Therefore,

board of adjustment, Group's execution of

the 2002 Restructuring Agreement cannot

create a contractual obligation to establish a multi-carrier
board of adjustment. that, regardless of whether the RLA compels

ALPA alleges

Group to create a multi-carrier board of adjustment,

Group has

breached its

contractual obligations under LOA 8 the Piedmont and PSA pilots'

to participate flow-through

in the resolution of

grievances and to establish an arbitral adjustment board with sufficient jurisdiction to resolve disputes arising from the denial of
bases

Piedmont and PSA pilots'

flow-through rights.
LOA 8

ALPA

this allegation on a provision of

entitled Dispute

Resolution Procedures.

That LOA 8 provision states that the

parties to the Dispute Resolution Procedures will be US Airways,
PSA and ALPA, Carriers. representing the pilots of US Airways and the later refers to US Airways Group in PSA

Because LOA 8

Section 9.e of

the Dispute Resolution Procedures,

it

is unclear

-21-

whether the alleged party to the Dispute Resolution Procedures Group or Airways. For the purposes of this lawsuit, however,

is

that issue does not matter because Group was not a signatory to
LOA 8.

As a non-signatory to LOA 8, alleged breach of
the commonsense

Group cannot be

sued for an

that contract.
that, in the

The Fourth Circuit has endorsed
labor law context, "a suit

rule

against a non-signatory of a contract cannot be for violation of
v. Covenant Coal

considered a suit

the contract."
Corp.. 977 F.2d

Int'l Union,
895, 897

United Mine Workers
1992) {LMRA

(4th Cir.

Section 3 01 preemption). Circuit agreed with the axiomatic
contract.

In Covenant Coal lower court's

Corp..

the Fourth "[i]t is

reasoning

that

that only a party to a contract
A contract governs only the

can violate that
of the parties who

conduct

have agreed to its

terms."

Id.

(internal quotations

omitted).

Here, LOA 8
8. As

ALPA itself in fact,

concedes that Group was not a signatory to

and,

PSA and ALPA were the only signatories to LOA
for breach of alleged

a result,

ALPA's claim against Group

contractual obligations under LOA 8
To the extent ALPA purports

cannot be

sustained.

to rely on a veil-piercing

theory,

the

Complaint's

factual allegations is no policy of
that

fall

short.

Courts

have recognized that
either legislative

"there

federal

labor law,

or judge-made,

a parent

corporation is

bound by its

subsidiary's

labor contracts

simply because it

-22-

controls

the subsidiary's

stock and participates
Am. Bell Inc. 1984) v.

in the
Tel.

subsidiary's management." Workers. 736 F.2d 879, 887

Fed'n of

(3d Cir. T.P.

(citing United 583 F.2d 33, 35-36

Paperworkers

Int'l Union v.

Prop.

Corp.,

(1st

Cir.

1978)).

Instead,

the questions

in federal
company has engaged in

veil-piercing cases fraudulent

are whether the parent it

conduct and whether its

so abused or that

ignored the and subsidiary

independence of should be

subsidiaries a

the parent

treated as

single company. nowhere alleges alleges that Group engaged in in

ALPA's Complaint fraud. While the

Complaint

that Group participates of the Group
that the

and exercises
Subsidiaries,

control
it does

over the operations
not go so far as

to allege

carriers

ceased entirely to operate as
does not allege

independent businesses,

and the Complaint were mere

that ALPA believed the carriers ALPA cannot rely on a to

sham operations.

Accordingly,

veil-piercing theory to extend alleged contractual obligations

Group based on a contract
For Inc., the foregoing Inc.,

that Group did not
Defendants'

sign.
US Airways Group,

reasons,

US Airways, Inc.

Piedmont Airlines, to Dismiss

Inc.,

and

PSA

Airlines,

Joint Motions

should be GRANTED.

-23-

An appropriate order shall

issue

/s/

Claude M. Hilton United States District Judge

August ~2*£ ,

Alexandria,

Virginia

2009

-24-