Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01633/USCOURTS-azd-2_08-cv-01633-3/pdf.json

Nature of Suit Code: 740
Nature of Suit: Railway Labor Act
Cause of Action: 45:151 Railway Labor Act

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Don Addington; John Bostic; Mark

Burman; Afshin Iranpour; Roger Velez;

Steve Wargocki,

Plaintiffs,

vs.

US Airline Pilots Association; US

Airways, Inc.,

Defendants. __________________________________

Don Addington; John Bostic; Mark

Burman; Afshin Iranpour; Roger Velez;

Steve Wargocki, et al., 

Plaintiffs, 

vs.

Steven Bradford; Paul Diorio; Robert

Frear; Mark King; Douglas Mowery; John

Stephan, et al., 

Defendants. 

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No. CV 08-1633-PHX-NVW

(consolidated)

ORDER

CV08-1728-PHX-NVW

Plaintiff pilots brought suit on their own behalf and on behalf of a proposed class of

similarly situated pilots alleging that Defendant US Airline Pilots’ Association (“USAPA”)

breached its duty of fair representation. Both parties requested a jury trial in their initial

pleadings (docs. # 86, 88), but the West Pilots now oppose USAPA’s request, arguing that

Case 2:08-cv-01633-NVW Document 202 Filed 02/18/09 Page 1 of 10
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1

 Fed. R. Civ. P. 38(d) provides that “A proper demand [for a jury trial] may be

withdrawn only if the parties consent.” This consent requirement does not extend to

demands that are not “proper,” that is, where no right to a jury trial exists.

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USAPA has no Seventh Amendment right to a jury trial here.1

 In order to facilitate the

prompt resolution of this case, the court has asked counsel to brief the jury trial issue at this

stage. That briefing is now complete. (Docs. # 159, 161, 169.) Although no jury trial would

be warranted if the plaintiffs sought only injunctive relief, such a trial will be granted because

their case includes a claim for compensatory damages.

I. Factual Background

A summary of Plaintiffs’ allegations follows, as stated in a previous order of this

Court. See Addington v. USAPA, 588 F. Supp. 2d 1051, 1055-57 (D. Ariz. Nov. 20, 2008)

[Doc. # 84].

This case concerns two sets of pilots. One set, the West Pilots, were employed as

pilots of America West Airlines, Inc. (“America West”) before May 2005. The other set, the

East Pilots, were employed by US Airways, Inc. (“US Airways”) at the same time. The

terms “East Pilots” and “West Pilots” refer only to pilots who were on the seniority lists of

their respective airlines at that time. Both groups of pilots were then represented by the

same labor union, the Air Line Pilots Association (“ALPA”). 

Toward the end of 2003, America West and the West Pilots negotiated a collective

bargaining agreement effective January 2004 (the “2004 CBA”). That agreement provided

that in the event of a merger where America West was not the surviving carrier, America

West would make reasonable efforts to have the surviving carrier “integrate the two Pilot

groups in accordance with [ALPA’s] Merger Policy.”

In May 2005, America West agreed to merge with US Airways. The merger

agreement provided that US Airways would succeed both air carriers in the combined

enterprise. A few months later, US Airways (now acting as a successor to both airlines),

entered into a multilateral contractual agreement with the East Pilots and the West Pilots.

This agreement was called the Transition Agreement, and it affected the collective bargaining

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relationships among the parties. Though the East Pilots and the West Pilots were both

represented by ALPA, the Transition Agreement was signed by Master Executive Councils

of both pilot groups. 

The allegations show that the negotiations and the resulting contract were designed

to resolve the tension between competing interests of the East Pilots and the West Pilots.

Some terms of the Transition Agreement benefited the East Pilots, some benefited the West

Pilots. The Agreement provided generally that, until the two airlines achieved operational

integration, only America West pilots would fly on pre-merger America West aircraft and

on western flights that were current and announced as of the time of the agreement. A

parallel provision existed for the East Pilots as to pre-merger US Airways aircraft and eastern

flights. Subject to the Transition Agreement, US Airways could continue to operate each

airline separately, in accordance with the terms of each carrier’s collective bargaining

agreement.

The Transition Agreement provided that during separate operations the parties were

to adopt a single integrated seniority list “in accordance with ALPA Merger Policy,” and the

parties were bound to accept the list if it complied with certain criteria. However, this new

seniority list would not be effective until the two operations were integrated. The Transition

Agreement also specified that during separate operations any newly hired pilots would be

placed on a third seniority list and made junior to all pilots on the America West and old US

Airways seniority lists. US Airways had a significant number of pilots on furlough status at

the time of the merger, so the parties agreed that America West could not hire new pilots

until all furloughed US Airways pilots had been offered recall. Separate operations under

separate seniority lists would continue until two events took place: the completion of an

integrated seniority list and the negotiation of a single collective bargaining agreement.

Within twelve months thereafter, operations would be consolidated under a single Federal

Aviation Administration operating certificate and the single seniority list would govern.

Pursuant to ALPA Merger Policy, the two groups of pilots attempted to create a single

integrated seniority list through mediation. This attempt failed. Pursuant to the same policy

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and the Transition Agreement, the East Pilots and the West Pilots brought the matter to

binding arbitration in October 2006, and arbitrator George Nicolau issued his decision in

May 2007, which included a new seniority list (the “Nicolau Award”). This list gave the

West Pilots seniority over the East Pilots who were on furlough at the time of the merger,

gave 517 East Pilots seniority over all West Pilots, and blended the seniority of the West

Pilots and the remaining East Pilots. The arbitrator considered the arguments of both sides

and explained why he considered this award fair and reasonable under the circumstances.

US Airways was a much older airline than America West, and for that reason the West Pilots

would have fallen lower on a merged date-of-hire list than they would have under the

Nicolau Award. However, at the time of the merger, US Airways had dim economic

prospects. The company was insolvent and operating in bankruptcy reorganization, and it

had 1,751 pilots on furlough status. America West, by contrast, was in stronger financial

condition, and all of its pilots were on active status. The arbitrator concluded that the

superior employment prospects of the West Pilots justified a superior position in the seniority

list. At the same time, he declined to give the West Pilots the full seniority that they

requested. On December 20, 2007, US Airways accepted this seniority list.

The East Pilots were unhappy with the results of the arbitration. In response, they

used their majority status to form a new union, USAPA. On April 18, 2008, the National

Mediation Board certified USAPA as the exclusive collective bargaining representative of

all pilots employed by US Airways. USAPA has shown itself to be hostile to the arbitrated

seniority list. During the campaign to start USAPA, its proponents expressly promised that

the new union would not follow the Nicolau Award. USAPA has refused its duty under the

2004 CBA and the Transition Agreement to bargain for implementation of the Nicolau

seniority list. In the meantime, US Airways has fallen on hard times and has furloughed

some West Pilots ahead of East Pilots who would have been junior to them if the Nicolau

Award had been implemented.

The named West Pilots brought this class action alleging that USAPA breached its

duty of fair representation by, among other things, causing the breach of contractual duties

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to honor the Nicolau Award. They seek injunctive relief and “damages to compensate

Plaintiffs for the value of lost wages and benefits caused by the injuries alleged herein.”

They have moved to certify a class that seeks only injunctive relief and the restitution of

union dues and fees paid to USAPA. 

II. Analysis

The Seventh Amendment protects a litigant’s right to a jury trial only if a cause of

action is legal (as opposed to equitable) in nature and involves a matter of “private right.”

Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 n.4 (1989). In this case, the fair

representation claim is legal in nature because it rests on contract-related claims and seeks

legal relief in the form of compensatory damages.

The Supreme Court has established a three-part test to determine whether the Seventh

Amendment right attaches. Only the first two parts are relevant here: “First, we compare

the statutory action to 18th-century actions brought in the courts of England prior to the

merger of the courts of law and equity. Second, we examine the remedy sought and

determine whether it is legal or equitable in nature. The second stage of this analysis is more

important than the first.” Id. at 42 (internal quotation marks and citations omitted).

A. Nature of the Claim

A claim that the union breached its duty of fair representation is analogous to an

equitable claim against a trustee, historically a creature of equity. Chauffeurs, Teamsters &

Helpers, Local No. 391 v. Terry, 494 U.S. 558, 567-68 (1990). Nonetheless, this

characterization does not end the inquiry because “[t]he Seventh Amendment question

depends on the nature of the issue to be tried rather than the character of the overall action.”

Id. at 569. 

Here, the West Pilots allege that the union has failed in its duty by causing the breach

of numerous contractual arrangements. As this Court understands the allegations, these

agreements established a framework for the fair resolution of seniority issues. By arbitrarily

disparaging them, the union has jettisoned its duty of fair representation. In fact, this

consolidated action originally included contract-based claims against other defendants: stateCase 2:08-cv-01633-NVW Document 202 Filed 02/18/09 Page 5 of 10
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law claims which have already been dismissed as preempted and federal labor law claims

which have been dismissed for failure to exhaust administrative remedies. Seventh

Amendment analysis in a fair representation action does not turn on the ability of the plaintiff

to maintain separate legal claims. Terry, 494 U.S. at 569-70 n.6. 

Thus, as a historical matter, this lawsuit includes both legal and equitable aspects. The

duty in this case is most analogous to a trustee’s duty, enforceable in equity. But the liability

itself is a function of contractual issues, which are legal in nature. See id. at 569-70 (breach

of contract); Germain v. Conn. Nat’l Bank, 988 F.2d 1323, 1328-29 (2d Cir. 1993)

(intentional interference with contract). “The first part of our Seventh Amendment inquiry,

then, leaves [the Court] in equipoise as to whether respondents are entitled to a jury trial.”

Terry, 494 U.S. at 570. 

B. Nature of Remedy

The second stage of the inquiry leaves no doubt that the Plaintiffs’ case involves legal

claims. Plaintiffs seek two primary forms of relief. First, they seek an injunction ordering

USAPA “to negotiate and implement a single collective bargaining agreement that fully

implements the Nicolau List.” Second, they seek “damages to compensate Plaintiffs for the

value of lost wages and benefits caused by the injuries alleged herein.” In their Motion for

Class Certification (doc. # 120), Plaintiffs make clear that their class action limits their

proposed class’s monetary claim to a refund of union dues and fees.

“It goes without saying that an injunction is an equitable remedy.” Weinberger v.

Romero-Barcelo, 456 U.S. 305, 311 (1982). If the injunction were the only relief Plaintiffs

sought, this Court would be inclined to hold that no jury trial right exists. The fundamentally

equitable nature of that remedy would establish the equitable character of the fair

representation issue under Terry. Plaintiffs seek other relief, however, which is legal, and

the Constitution requires a jury to decide issues common to legal and equitable claims. 

Plaintiffs’ claims for lost wages against the union are legal in nature because they are

compensatory. “The backpay sought by [Plaintiffs] is not money wrongfully held by the

Union, but wages and benefits they would have received from [US Airways]” had the union

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not breached its duty. Terry, 494 U.S. at 570-71. “Such relief is not restitutionary” because

the union is not unjustly enriched by the employer’s failure to pay wages. Id. at 571. This

type of relief is “clearly different” from equitable backpay, where the employer is made to

return (rather than replace) moneys rightfully belonging to the plaintiff. See id. at 572. 

It is of no moment that as a matter of historical practice, courts of equity would grant

monetary awards against trustees who breached their fiduciary duties. In Terry, the Court

considered and rejected this very argument. Id. at 571 n.8. The monetary relief sought here

is in the nature of compensatory damages, as illustrated above. It is this general character

of the remedy that guides this analysis, not the niceties of eighteenth-century chancery.

Indeed, historical reality compels this pragmatic approach because the line separating law

from equity jurisdiction was not clearly drawn even in those ancient days. See Terry, 494

U.S. at 577 (Brennan, J., concurring); 3 W. Blackstone, Commentaries 436-37 (1st ed. 1765-

1769). Thus, “[t]he second part of [Seventh Amendment] analysis . . . should not replicate

the abstruse historical inquiry of the first part, but requires consideration of the general types

of relief provided by courts of law and equity.” Terry, 494 U.S. at 571 n.8 (internal quotation

marks and citation omitted).

Plaintiffs argue that the chief thrust of their complaint is equitable, and that their

motion for class certification limits class remedies to injunctive and restitutionary relief.

This contention is without force. Regardless of the limited nature of Plaintiffs’ class action,

the amended complaint still seeks a damages remedy on behalf of the named Plaintiffs. And

even if the first trial in this case only addresses the liability facts, the Supreme Court has

made it clear that the jury right cannot be impaired “by any blending with a claim, properly

cognizable at law, of a demand for equitable relief in aid of the legal action, or during its

pendency.” Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510 (1959). The Court

continued, “[O]nly 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. No

imperative circumstances exist here. The issue of USAPA’s liability vel non in law and

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equity must be tried to a jury. If subsequent or separate factual issues respecting equitable

relief arise, it may be that those issues are tried to the bench.

It is not now necessary to decide whether, in the absence of Plaintiffs’ lost wage

claims, the claims for a refund of class members’ union dues and fees would require a jury

trial. A preliminary analysis reveals doubts surrounding this particular monetary claim.

First, it is unclear whether the Plaintiffs have adequately alleged recovery of dues and fees

as a form of relief in their First Amended Complaint. Second, it is unclear what legal

grounds the Plaintiffs can claim as a basis for a refund of dues and fees in a fair

representation case. At the moment, it is enough to say that the named Plaintiffs’ claim for

compensatory damages supports the Seventh Amendment right.

B. The Ramey Decision

One district court has reached a contrary conclusion on similar, but not identical facts.

See Ramey v. Dist. 141, Int’l Ass’n of Machinists & Aerospace Workers, 473 F. Supp. 2d

365, 373 (E.D.N.Y. 2007). Like this case, Ramey involved a fair representation action

seeking injunctive and monetary relief. Unlike this case, the union in Ramey was not said

to have caused a breach of contract. Equally important is that decision’s characterization of

backpay damages claims against the union as “incidental” to injunctive relief sought. See

id. at 373. Ramey held that no jury right attached to such damages because they “merely

make the injunction fully effective.” Id. In this respect, it is necessary to depart from

Ramey’s reasoning.

In Terry, the Supreme Court noted that a monetary award “incidental to or intertwined

with injunctive relief may be equitable.” 494 U.S. at 572 (internal quotation marks and

citation omitted); see also Wooddell v. Int’l Bhd. of Elec. Workers, Local 71, 502 U.S. 93,

97-98 (1991) (summarizing this aspect of Terry). The authority underlying this statement

undercuts its apparent force, however. In neither case Terry cites were plaintiffs allowed to

try “incidental” claims for legal damages without a jury. See Tull v. U.S., 481 U.S. 412, 424

(1987); Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 291-92 (1960). Each case

simply reaffirmed the rule that the Seventh Amendment requires no jury for equitable awards

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of restitution. Terry itself articulates no new standard for “incidental” damages of a legal

nature; it scarcely reaches the question because the plaintiff had sought no equitable relief

at all. See 494 U.S. at 571. 

When Terry is read in the larger context of Seventh Amendment doctrine, it does not

support the broad reading put forth in Ramey. It has long been the rule that a showing that

legal damages are “incidental” to an injunction, on its own, is not sufficient to escape the

Seventh Amendment mandate. Justice Black wrote to this effect in Dairy Queen, Inc. v.

Wood, finding the argument so repellent that he disposed of it at the threshold before the

substantive facts of the case were presented. 369 U.S. 469, 470-73 (1962). Such an

exception was not an intended result of the merger of law and equity; practice taught that it

would pose a great threat to Seventh Amendment rights. Id. at 471–72. “[A]fter the adoption

of the Federal Rules, attempts were made indirectly to undercut [the Seventh Amendment]

by having federal courts in which cases involving both legal and equitable claims were filed

decide the equitable claim first. . . . [A]ny issue common to both the legal and equitable

claims was finally determined by the court and the party seeking trial by jury on the legal

claim was deprived of that right as to these common issues.” Id. at 472. 

Beacon Theatres corrected this trend, Justice Black explained, by holding that “where

both legal and equitable issues are presented in a single case, ‘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.’ That holding, of course, applies whether the trial judge

chooses to characterize the legal issues presented as ‘incidental’ to equitable issues or not.”

Id. at 472–73 (citing Beacon Theatres, 359 U.S. at 510-11). Years later, the Court put it

more bluntly: “[W]here equitable and legal claims are joined in the same action, there is a

right to jury trial on the legal claims which must not be infringed either by trying the legal

issues as incidental to the equitable ones or by a court trial of a common issue existing

between the claims.” Ross v. Bernhard, 396 U.S. 531, 537-38 (1970). Drafting in the

slipstream of Dairy Queen, the Ninth Circuit restated the rule: “[E]xcept under most

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imperative circumstances, a right to a jury trial on legal issues may not now be denied to a

federal litigant . . . because the legal issues are ‘incidental’ to the equitable issues . . . .”

DePinto v. Provident Sec. Life Ins. Co., 323 F.2d 826, 835-36 (9th Cir. 1963) (footnote

omitted).

The Ramey decision does not distinguish Dairy Queen. Neither Terry nor Woodell

purports to revisit it; Terry simply noted that the plaintiffs could not call their damages

claims “incidental” because they sought no equitable relief at all. The Ninth Circuit

continues to invoke Dairy Queen as good law. See, e.g., Danjaq LLC v. Sony Corp., 263

F.3d 942, 962 (9th Cir. 2001); Granite State Ins. Co. v. Smart Modular Techs., Inc., 76 F.3d

1023, 1027 (9th Cir. 1996). 

Even if the legal claims are assumed to be incidental, the case at bar presents no

“imperative circumstances” that weigh against the use of a jury. 

IT IS THEREFORE ORDERED that Defendants’ Request for a Jury Trial (docs. #

88, 159) is granted.

DATED this 17th day of February, 2009.

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