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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 04-1405

No. 04-1757

___________

Susan Smith, *

*

Plaintiff - Appellant, *

*

v. * Appeals from the United States

* District Court for the

American Airlines, Inc.; TWA * Eastern District of Missouri.

Airlines, LLC; Airline Pilots *

Association Int’l, *

*

Defendants - Appellees. *

___________

Submitted: January 11, 2005

Filed: July 18, 2005

___________

Before LOKEN, Chief Judge, MORRIS SHEPPARD ARNOLD and MURPHY,

Circuit Judges.

___________

LOKEN, Chief Judge.

After American Airlines (AA) purchased the assets of bankrupt Trans World

Airlines, Inc. (TWA), AA refused to hire Susan Smith, a former TWA pilot. The Air

Line Pilots Association (ALPA) filed separate grievances on Smith’s behalf against

TWA and AA. ALPA settled the TWA grievance with TWA’s bankruptcy estate.

When AA rejected Smith’s separate grievance against AA, Smith commenced this

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AA established a wholly owned subsidiary, Trans World Airlines LLC, to

operate TWA’s assets during the post-acquisition transition period. Both AA and its

subsidiary are co-defendants in this action. For convenience, we refer to the actions

of the subsidiary as though they were actions of AA. 

2

The HONORABLE HENRY E. AUTREY, United States District Judge for the

Eastern District of Missouri.

3

Smith’s simultaneous employment with AA and TWA violated both airlines’

policies. Smith admits TWA would likely have fired her had she disclosed this fact.

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action against AA1

 and ALPA. The district court2 granted summary judgment in

favor of defendants on all claims. Smith appeals the dismissal of her Railway Labor

Act (RLA) claims, arguing that the transition collective bargaining agreement gave

her a right to post-acquisition employment with AA, and that she may litigate this

claim in federal court because (i) AA repudiated the exclusive grievance/arbitration

remedies in the collective bargaining agreement, and (ii) ALPA breached its duty of

fair representation by not vigorously pursuing her rights in the grievance process.

Reviewing the district court’s grant of summary judgment de novo, we affirm.

I. Background. 

In 1998, while employed by TWA, Smith received an offer of employment

from AA and secretly enrolled in its pilot training program. Smith took the AA pilot

training during a personal leave of absence from TWA. Both airlines then considered

her an employee. Some weeks later, AA discharged Smith, primarily because she

failed to successfully complete the training program. Smith returned to her duties as

a TWA pilot when her personal leave ended.3

The 2001 Asset Purchase Agreement between AA and TWA provided that AA

would offer post-acquisition employment to “all of [TWA’s] U.S.-based union

employees (other than personnel who (A) have previously been terminated by [AA]

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. . . or (B) would not be qualified for employment under [AA’s] general hiring

policies as in effect at Closing)” (emphasis added). That provision was inconsistent

with ALPA’s existing collective bargaining agreement with TWA, which provided

that any successor of TWA must “employ the pilots on the TWA Pilots System

Seniority List.” But threatened with possible bankruptcy court repudiation of the

entire bargaining agreement, ALPA agreed to modify this aspect of the existing

agreement and, after the closing, to enter into a transition collective bargaining

agreement with AA. According to Smith’s view of the relevant documents, the

transition agreement incorporated by reference a pre-closing letter from AA to ALPA

stating: “It is [AA’s] intention that all of TWA’s U.S. based represented employees

who meet the qualifications described in the Asset Purchase Agreement become [AA]

employees as quickly as possible.” 

After the closing, AA hired TWA pilots it considered eligible under the Asset

Purchase Agreement provision but advised that Smith and six others were ineligible

because they were previously terminated by AA or an AA affiliate. ALPA filed

grievances on behalf of the seven pilots. In the months following the asset purchase,

the grievances ALPA filed with TWA for wrongful discharge became claims for

administrative expenses in TWA’s bankruptcy proceedings. AA refused to proceed

with the separate grievances ALPA filed under the transition collective bargaining

agreement on the ground that the ineligible pilots were not AA employees covered

by that agreement. However, AA notified the ineligible pilots that they could appeal

its hiring decisions by submitting “documentation they feel is appropriate to support

their request for review.” In addition, ALPA officials sought meetings for the seven

pilots and informally attempted to plead their cases. Four submitted documentation

and argued that their prior separations should not be characterized as terminations.

AA agreed and hired them. AA later offered to meet informally with the other three.

Smith submitted no documentation supporting her claim that she had resigned from

AA in 1998, and she declined AA’s offer to discuss her case informally. She was not

hired. This lawsuit followed. 

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Technically, when the employee asserts a state law breach of contract claim,

the claim is preempted by the RLA if it depends on an interpretation of the collective

bargaining agreement. See McCormick v. Aircraft Mechanics Fraternal Ass’n, 340

F.3d 642, 644 (8th Cir. 2003). On the other hand, when the employee asserts a

federal claim under the RLA for breach of the collective bargaining agreement, as

Smith does in this case, the question is not preemption but whether the claim is barred

by the failure to exhaust the contractual adjustment board remedy as construed by the

Supreme Court. See Andrews v. Louisville & N.R.R., 406 U.S. 320, 325 (1972). 

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II. The RLA Claims.

Smith argues that AA breached the transition collective bargaining agreement

by failing to hire her after purchasing TWA’s assets and by refusing to process her

grievance under that agreement. AA denies that it was contractually bound to hire

Smith. Moreover, AA contends that Smith has no claim under the RLA because she

was not an AA employee within the meaning of either the RLA, see 45 U.S.C. § 151,

Fifth, or the transition bargaining agreement. The district court agreed. 

Whether Smith was an employee within the meaning of the RLA is an aspect

of the merits of her claim. That claim is, in the language of the Act, a “minor dispute”

-- a controversy “over the meaning of an existing collective bargaining agreement in

a particular fact situation.” Bhd. of R.R. Trainmen v. Chicago R. & I.R. Co., 353

U.S. 30, 33 (1957). This is a federal claim that “must be resolved only through the

RLA mechanisms, including the carrier’s internal dispute-resolution processes and

an adjustment board established by the employer and the unions.” Hawaiian Airlines,

Inc. v. Norris, 512 U.S. 246, 253 (1994). Under the RLA, minor disputes are subject

to mandatory arbitration before an adjustment board which has primary jurisdiction

to construe the collective bargaining agreement. The aggrieved employee “may not

resort to the courts in the first instance.” Penn. R.R. v. Day, 360 U.S. 548, 552

(1959).4

 However, the Supreme Court has recognized exceptions to this rule,

situations “in which the employee should not be limited to the exclusive remedial

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Though applicants for employment are not “employees” under the RLA if the

collective bargaining agreement leaves hiring decisions to the employer’s discretion,

a dispute over whether the relevant collective bargaining agreement gives employees

of the selling carrier a right to priority in the buyer’s post-acquisition hiring may well

be an issue that must be submitted to the adjustment board. See Pyles v. United Air

Lines, Inc., 79 F.3d 1046, 1051-52 (11th Cir. 1996).

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procedures established by the contract.” Vaca v. Sipes, 386 U.S. 171, 185 (1967).

Smith argues that two of those exceptions are applicable here.

1. Emphasizing on appeal an issue that was preserved but not argued in the

district court, Smith argues that she may litigate her RLA breach of contract claim in

federal court, without exhausting the adjustment board remedy provided by the

transition collective bargaining agreement, because AA’s refusal to process her

grievance under that agreement “amounts to a repudiation of those contractual

procedures.” Vaca, 386 U.S. at 185. We disagree. 

When AA declared seven pilots ineligible for post-acquisition hire because of

prior terminations, Smith and the others argued they had a contractual right to

become covered employees, and ALPA filed grievances on their behalf. The

transition agreement provided grievance procedures for “pilots covered by this

Agreement.” AA took the position that these contractual procedures did not apply

because Smith and the others were not hired and therefore were not employees

“covered by” the agreement. Instead, AA offered an informal procedure whereby the

seven could seek review of its initial decisions. Four of the seven did so and were

hired; Smith refused AA’s offer of an informal meeting. The transition agreement

further provided that the RLA-mandated adjustment board “shall have jurisdiction

over disputes between any employee covered by this Agreement and the Company,

growing out of . . . interpretation or application of any of the terms of this

Agreement.” AA took the position that the adjustment board lacked jurisdiction over

this dispute, again because Smith was not a covered employee.5

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The result of this impasse was a classic dispute over “arbitrability,” that is, the

question whether AA and ALPA agreed in the transition agreement to submit this

type of disagreement to the adjustment board. The way to resolve such disputes is by

a suit to compel arbitration. See generally First Options of Chicago, Inc. v. Kaplan,

514 U.S. 938 (1995). In RLA cases, arbitrability determines the adjustment board’s

jurisdiction and is therefore a question for the court. But “in deciding whether the

parties have agreed to submit a particular grievance to arbitration, a court is not to

rule on the potential merits of the underlying claims.” AT&T Tech., Inc. v.

Communications Workers of Amer., 475 U.S. 643, 649 (1986).

Viewed in this light, it is apparent that AA did not “repudiate” the grievance

and arbitration procedures in the transition collective bargaining agreement. It simply

took the position that they did not apply to this dispute. ALPA could have presented

the question of arbitrability by suing to compel AA to submit the dispute to the

adjustment board. But ALPA did not do, and Smith does not contend this was a

breach of the union’s duty of fair representation. Nor does Smith seek to compel

arbitration in this lawsuit. Instead, she asks the federal court to litigate the merits of

her claim, contrary to the strong federal policy that RLA minor disputes should be

arbitrated, not litigated. Where all an employee shows is the need for judicial help

in compelling arbitration, the repudiation exception does not apply. A federal court

may compel arbitration at the employee’s (or the union’s) request, but it may not

intrude upon the adjustment board’s authority by deciding the merits of the collective

bargaining agreement dispute. See Capraro v. United Parcel Serv. Co., 993 F.2d 328,

336-37 (3d Cir. 1993); accord Pyles, 79 F.3d at 1052. 

2. Alternatively, Smith renews on appeal her primary RLA argument to the

district court -- that she may bring her breach of contract claim to federal court

without exhausting the mandatory arbitration remedy under the recognized exception

for “hybrid” claims “that allege both a breach of the collective bargaining agreement

by the employer and a breach of the duty of fair representation by the union.”

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McCormick, 340 F.3d at 645. The duty of fair representation is breached “when a

union’s conduct toward a member of the collective bargaining unit is arbitrary,

discriminatory, or in bad faith.” Vaca, 386 U.S. at 190. Smith alleges that ALPA

breached its duty by more aggressively pursuing the claims of the six other ineligible

pilots during the informal review process conducted by AA.

Some circuits have limited this exception to cases where the union’s breach of

duty caused the employee to lose her right to press a grievance before the arbitration

board. See Miklavic v. USAir Inc., 21 F.3d 551, 557 (3d Cir. 1994), and cases cited.

This limitation is consistent with the purpose behind the exception, see Vaca, 386

U.S. at 185, and thus has much to commend it. Smith does not fall within the

exception so limited because (i) ALPA submitted her grievance to the adjustment

board, (ii) Smith does not claim that ALPA breached its duty by failing to bring an

action to compel arbitration, and (iii) Smith failed to show that ALPA’s action

prevented her from pressing her own grievance by suing to compel arbitration. 

The district court did not consider this limitation, concluding instead that “the

record establishes that none of the actions taken by ALPA were arbitrary,

discriminatory or in bad faith.” We agree. ALPA filed grievances on behalf of the

ineligible pilots and then assisted them in pursuing relief through AA’s informal

review process. Four pilots presented satisfactory evidence explaining their prior

separations and were hired. Smith refused to meet with AA and acknowledged she

knew of no document establishing that she was not terminated by AA. “A union does

not act arbitrarily simply because it does not pursue a grievance that it has decided

lacks merit.” Schmidt v. IBEW, Local 949, 980 F.2d 1167, 1170 (8th Cir. 1992)

(quotation omitted). In these circumstances, even if true, ALPA’s alleged decision

to assist more aggressively the ineligible pilots who had stronger claims for relief

under the transition collective bargaining agreement than Smith does not come close

to establishing a breach of the union’s duty of fair representation.

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For the foregoing reasons, we conclude that Smith’s RLA claims against both

AA and ALPA were properly dismissed.

III. A Taxation of Costs Issue.

After the district court granted summary judgment dismissing Smith’s claims,

defendants filed bills of costs. Smith failed to object, and the clerk taxed the costs

claimed. One month later, Smith moved to reconsider, arguing that many of the taxed

costs were improper. The district court denied this motion, noting that Smith did not

“set forth any authority under the applicable rules . . . for the Court to reconsider the

taxation of costs,” and that “the costs which were taxed are in accordance with 28

U.S.C. § 1920.” On appeal, Smith urges us to treat her motion to reconsider as a

motion for relief under Rule 60(b)(1). So construed, she argues that its denial was an

abuse of discretion because she terminated her trial counsel before receiving the bills

of costs and should therefore be relieved from complying with the local rule requiring

the filing of objections within fourteen days. 

Rule 60(b)(1) authorizes the district court to grant relief from an order based

upon a showing of “mistake, inadvertence, surprise, or excusable neglect.” In this

case, Smith made no such showing to the district court. Indeed, she did not argue

excusable neglect nor even cite Rule 60(b)(1). Thus, the court did not abuse its

discretion in failing to grant Rule 60(b) relief. Moreover, even if Smith had raised

the issue of excusable neglect in the district court, the local rule requiring objections

to the bills of costs within fourteen days was clear, and therefore her failure to comply

“will not constitute excusable neglect under Rule 60(b).” Bennett v. Dr. Pepper/

Seven Up, Inc., 295 F.3d 805, 808 (8th Cir. 2002).

The judgment of the district court is affirmed.

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