### 1997 D e c i sion s O p inion s of the U nit e d

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# I n R e: C on t ine n t al Air lines

P r e c e de n t i al or N on-P r e c e de n t i al :

D ock e t

96-7028,96-7038



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. e du/thir dc ir c uit_1997/213Filed August 29, 1997

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 96

- 7028 and 96

- 7038

IN RE: CONTINENTAL AIRLINES,

Debtor

AIR LINE PILOTS ASSOCIATION

v.

CONTINENTAL AIRLINES

LPP CLAIMANTS; EFFECTIVE DATE COMMIT TEE,

Claimants

HONORABLE JOHN STONITSCH,

Trustee

LPP CLAIMANTS,

Appellant No. 96

- 7028

(Caption amended in accordance with

Clerk's Order dated 3/4/96)

IN RE: CONTINENTAL AIRLINES,

Debtor

AIR LINE PILOTS ASSOCIATION

v.

CONTINENTAL AIRLINES

LPP CLAIMANTS; EFFECTIVE DATE COMMITTEE,

Claimants

HONORABLE JOHN STONITSCH,

TrusteeCONTINENTAL AIRLINES, INC.,

Appellant No. 96

- 7038

(Caption amended i n accordance with

Clerk's Order dated 3/4/96)

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

(D.C. Civil No. 93

- cv

- 00163)

ARGUED MARCH 13, 1997

BEFORE: MANSMANN, LEWIS and

MICHEL,* Circuit Judges.

(Filed Aug ust 29, 1997)

_________________________________________________________________

* Honorable Paul R. Michel, Circuit Judge for the United States Court of

Appeals for the Federal Circuit, sitting by designation.

2

Jon A. Geier (ARGUED)

Paul, Hastings, Janofsky & Walker

1299 Pennsylvania Avenue, N.W.

10th Floor

Washington, DC 20004

Laura D. Jones

Robert S. Brady

Young, Conaway, Stargatt & Taylor

Post Office Box 391

Rodney Square North, 11th Floor

Wilmington, DE 19899

- 0391

Attorneys for Continental Airlines

Michael J. Isaacs

Agostini, Levitsky & Isaacs

623 King Street

Post Office Box 2323

Wilmington, DE 19899

Myles J. Tralins (ARGUED)

Tralins & Associates

One Biscayne Tower

2 South Biscayne BoulevardSuite 3310

Miami, FL 33131

Attorneys for LPP Claimants

Joh n A. McGuinn (ARGUED)

Schmeltzer, Aptaker & Shepard

2600 Virginia Avenue, N.W.

Suite 1000

Washington, DC 20037

Attorney for Eastern Pilots Merger

Committee

3

OPINIO N OF THE COURT

LEWIS, Circuit Judge.

In this appeal and cross

- appeal, we are confronted with

a tension between bankruptcy law and labor law. The

dispute arose when the Air Line Pilots Association, Inc.

("ALPA"), collective bargaining agent for Eas tern Air Lines'

("Eastern") pilots, filed proofs of claim in bankruptcy court

against Continental Airlines Holdings, Inc. and Continental

Airlines, Inc. ("Continental"). These claims were based on

alleged seniority integration rights stemming from a

p ending labor arbitration dispute and were filed following

Continental's acquisition of Eastern and subsequent refusal

to bargain over the seniority integration of Eastern's pilots.

The bankruptcy court determined that the claims could

be satisfied by monetary awards in lieu of specific

performance and enjoined scheduled arbitration

proceedings to enforce the seniority rights under the

collective bargaining agreement. The district court affirmed

the bankruptcy court's determination relating to the claims,

but vacated the injunction. Two groups of former Eastern

pilots, the LPP Claimants and the Group of 31, both of

which are no longer represented by ALPA, appealed to this

court.1

Resolution of this dispute requires us to determine: (1)

wheth er the bankruptcy claims that the LPP Claimants and

the Group of 31 seek to enforce constitute "claims" within

the meaning of the bankruptcy code and thus are

satisfiable, in the alternative, by a monetary award; and (2)

whether the arbitration of a la bor dispute that may give rise

_________________________________________________________________

1. "LPP Claimants" refers to a group of former Eastern pilots whoseclaims in this appeal are based on certain "labor protective provisions"

(LPPs) conta ined in the collective bargaining agreement. The "Group of

31" is a group of former Eastern pilots, who originally were part of the

"LPP Claimants" group and who have retained separate counsel for

purposes of this appeal. See discussion infra Part I.D. While both groups

claims were filed in bankruptcy court by ALPA on their behalf, these two

groups are no longer represented by ALPA. See discussion infra note 5.

4

to the right to seniority integration under a co llective

bargaining agreement can be enjoined, where the debtor

has not explicitly rejected the agreement. We conclude that

the rights to seniority integration do constitute "claims"

within the meaning of the bankruptcy code. Accordingly, we

find that the right to seniority integration gives rise to a

right of payment and that any equitable remedy recovered

against Continental via arbitration of the underlying labor

dispute may be satisfied through an award of monetary

damages. We further conclude that the district court

properly vacated the injunction barring arbitration of the

underlying labor dispute. Thus, we will affirm.

I.

A. The Underlying LPP Dispute

On February 23, 1986, following intense negotiations,

Eastern and its pilots' un ion, ALPA, ratified a collective

bargaining agreement. On February 24, 1986, the Texas Air

Corporation ("Texas Air"), parent corporation to

Continental, acquired Eastern. Believing that the

acquisition constituted a "merger" within the meaning of

cert ain "labor protective provisions" (LPPs) contained in the

collective bargaining agreement, ALPA requested a meeting

with Texas Air, Eastern, and Continental to discuss the

integration of Eastern's and Continental's seniority lists.

Under the LPPs, East ern's pilots secured protection of their

seniority rights in the event of a merger between Eastern

and another airline carrier through the integration of

Eastern's seniority lists with the merging carrier's list.

Specifically, the LPP terms provide:

Section 2(a). The term "merger" as used herein means

joint action by the two carriers whereby they unify,

consolidate, merge, or pool in whole or in part their

separate airline facilities or any of the operations or

services previously performed by them through such

separate facilities.

* * *Section 3. Insofar as the merger affects the seniority

rights of the carriers' employees, provisions shall be

5

made for the integration of seniority lists in a fair and

equitable manner, including, where applicable,

agreement through collective bargaining between the

carriers and the representative of the employees

affe cted. In the event of failure to agree, the dispute

may be submitted by either party for adjustment in

accordance with section 13.

* * *

Section 13(a). In the event that any dispute or

controversy . . . arises with res pect to the protections

provided herein, which cannot be settled by the parties

within 20 days after the controversy arises, it may be

referred by any party to an arbitrator selected from a

panel of seven names furnished by the National

Mediation Board for consideration and determination.

(Labor Protective Provisions, sections 2(a), 3, and 13(a)).2

Despite ALPA's requests, both Eastern and Continental

refused to bargain with ALPA about the integration of the

s eniority lists. Consequently, ALPA requested the National

Mediation Board to proffer a list of seven arbitrators from

which a neutral arbitrator could be chosen to determine

whether an alleged merger occurred between Eastern and

Continental that trigge red the LPP seniority integration

provision (LPP dispute). Eastern, however, filed for

bankruptcy in March, 1989, and refused to submit to

arbitration pursuant to the bankruptcy code's section 362

automatic stay provision. 11 U.S.C. S 362 (providing th at

petitions filed pursuant to Chapter 11 operate as a stay of

the commencement or continuation of judicial,

administrative, or other actions or proceedings against the

debtor). In bankruptcy court, ALPA sought relief from the

automatic stay to compel Eastern to arbitrate the LPP

_________________________________________________________________

2. The LPPs were based on the standard Allegheny

- Mohawk LPPs, which

were designed to provide "displacement and dismissal allowances to

employees adversely affected by [merger] transaction[s], the equitable

integration of seniority lists, and binding arbitration of disputes

relating

to the LPPs." (Decision of the Eastern Air Lines Pilots System Board of

Adjustment). See Air Line Pilots Ass'n v. Dept. of T ransp., 838 F.2d 563,

565 (D.C. Cir. 1988) (citing Allegheny

- Mohawk Merger Case, 59 C.A.B.

22 (1972)).6

dispute. The bankruptcy court denied ALPA's petition. After

much litigation, however, the Court of Appeals for the

Second Circuit held that the section 362 automatic stay

provision did not preclude arbitration in this instance. See

In re Ionosphere Clubs, Inc., 922 F.2d 984 (2d Cir. 1990).

ALPA and Eastern proceeded to arbitration in April,

1991, commen cing with a pre

- hearing conference before

Richard R. Kasher (Kasher Arbitration). In this proceeding,

ALPA sought prospective integration of seniority lists, back

pay from the effective date of the merger to the date of the

arbitration award, and front pay from the date of the

arbitration award to the date that the Eastern pilots would

complete training and begin flying for Continental. Prior to

the pre

- hearing conference, Arbitrator Kasher solicited brief

statements of position from the parties to the dispute, and

from all potential parties. Eastern consistently maintained

that the LPP dispute was not properly within the

arbitrator's jurisdiction.3 Continental filed a statement

informing Arbitrator Kasher that it had filed a Chapter 11

petition for reorganization in December, 1990. Therefore, it

maintained that the arbitration pursued by ALPA was

stayed under section 362 of the bankruptcy code and could

not proceed without the express approval of the bankruptcy

court.

In August, 1992, Arb itrator Kasher issued a decision

concluding that he had jurisdiction over the LPP dispute,

and could render a determination of the appropriate

remedies under the circumstances. Kasher, relying on the

bankruptcy court's determination in In re Ionosphere Clubs,

Inc., 114 B.R. 379 (Bankr. S.D.N.Y. 1990), specifically

rejected Continental's suggestion that the arbitration was

barred by the automatic stay. Kasher scheduled hearings

on the merits of the dispute, to commence in February,

1993.

__________ _______________________________________________________

3. Eastern maintained that only the System Board of Adjustment had

jurisdiction to determine whether a merger occurred that triggered the

LPPs. On the merits, Eastern contended that if the arbitr ation proceeded,

the Arbitrator should conclude that no merger occurred.

7

B. The Bankruptcy Court ProceedingsIn September, 1991, while the initial Kasher Arbitration

decision was pending, ALPA, on behalf of its members, filed

proofs of claim against Continental in Delaware Bankruptcy

Court. Their claims were based on the asserted right to

seniority integration under the LPPs and specified an

unliquidated amount as the debt for which Continental was

oblig ated. In response, Continental initiated an adversary

proceeding in bankruptcy court against ALPA, seeking

injunctive and declaratory relief relating to the proofs of

claim. In that action, Continental filed a Partial Objection

To Allowance of Claims a nd a Motion for Partial Summary

Judgment on its Partial Objection.4 In both motions,

Continental contended that the seniority integration that

the claimants sought was not feasible because it would be

detrimental to Continental's successful reorganizat ion.

Thus, Continental sought a declaration that the claims

were, at best, "general, dischargeable, pre

- petition,

unsecured claims," compensable by an award of monetary

damages.

ALPA and the LPP Claimants each filed a separate

response to Continent al's Partial Objection and Motion for

Partial Summary Judgment.5 ALPA contended that,

contrary to Continental's argument, the claims pursued

were not general, unsecured pre

- petition claims that could

be converted to a payment of money damages. ALPA als o

argued that only an arbitrator had jurisdiction to determine

_________________________________________________________________

4. Prior to the Kasher Arbitration decision, Continental filed an initial

motion for partial summary judgment, seeking a preliminary injunction.

Continental argued that the arbitration should be enjoined to protect the

jurisdiction of the bankruptcy court over the administration of its

estate.

It also maintained that the automatic stay provision of the bankruptcy

code pr ecluded the arbitration from proceeding. Finally, Continental

contended that it was not a party to the collective bargaining agreement

between Eastern and ALPA and that it could not be bound by the result

of any arbitration over the LPPs.

5. ALPA's r epresentation of the LPP Claimants ceased after the LPP

Claimants instituted actions in federal court against ALPA. The actions

alleged causes of action for the breach of the duty of fair representation

and defamation arising out of the publication and dissemination of a

"blacklist" and for alleged violations of the civil provisions of RICO.

8

the appropriate remedy under the LPPs. The LPP Claimants

essentially maintained that an arbitration proceeding was

the appropriate forum to determine the issue of whether a

merger occurred that triggered the LPPs, and that theproper remedy was integration of Eastern's seniority lists

with Continental's lists.

In February, 1993, the bankruptcy court judge, in two

o rders, granted Continental's Partial Objection To

Allowance of Claims and its related motion for partial

summary judgment, determining that there was no genuine

issue for trial and that Continental was entitled to

judgment as a matter of law. In re Con tinental Airlines, Inc.,

et al., Nos. 90

- 932 through 90

- 984 (Bankr. D. Del. Feb. 11,

1993) (order granting motion for partial objection to

allowance of claims); In re Continental Airlines, Inc., et al.,

No. 91

- 153 (Bankr. D. Del. Feb. 11, 1993) (order granting

motion for partial summary judgment). Addressing the

jurisdictional argument asserted by ALPA, the bankruptcy

court concluded that the issue of whether any award

granted to ALPA would constitute general, unsecured, pre

petition claims was a core matter under the bankruptcy

code. Thus, it concluded that it had jurisdiction to resolve

the matter. In re Continental Airlines, Inc., et al., Nos. 90

- 932 through 90

- 984, slip op. at 1

- 2 (order granting motion

for partial objection to allowance o f claims); In re

Continental Airlines, Inc., et al., No. 91

- 153, slip op. at 2

(order granting motion for partial summary judgment). The

court then determined that the equitable remedy of

seniority integration constituted a "claim" within the

meaning of S 101(5) of the bankruptcy code. Accordingly,

the court concluded that the remedy could be converted to

an award of money damages. In re Continental Airlines, Inc.,

et al., Nos. 90

- 932 through 90

- 984, slip op. at 3

- 4 (order

granting motion for parti al objection to allowance of claims);

In re Continental Airlines, Inc., et al., No. 91

- 153, slip op. at

3

- 4 (order granting motion for partial summary judgment).

Finally, the court determined that any right of payment

asserted by ALPA was, at best, a g eneral, dischargeable,

unsecured claim that was entitled to no administrative

priority. In re Continental Airlines, Inc., et al., Nos. 90

- 932

through 90

- 984, slip op. at 4

- 5 (order granting motion for

partial objection to allowance of claims); In re Co ntinental

9

Airlines, Inc., et al., No. 91

- 153, slip op. at 5 (order granting

motion for partial summary judgment).

In April, 1993, Continental's Second Amended Joint Plan

of Reorganization was confirmed by th e bankruptcy court.

The court's confirmation order incorporated its prior rulings

from the two orders issued in February, 1993. Essentially,

it clarified that any valid claims based on the LPPs would

give rise to a right of payment dischargeable in ban kruptcy

and that no right to injunctive, equitable or otherprospective relief would flow from any valid claim based on

an award under the LPPs. In re Continental Airlines, Inc., et

al., Nos. 90

- 932 through 90

- 984 (Bankr. D. Del. April,

1993) (Finding s of Fact, Conclusions of Law and Order

Confirming the Debtors' Revised Second Amended Joint

Plan of Reorganization). The court also enjoined the

arbitration of the LPP dispute. Continental's plan of

reorganization was consummated in late April, 1993.

C. The ALPA/Continental Settlement

ALPA and the LPP Claimants appealed the bankruptcy

court's February and April, 1993 orders to the district

court. While the appeals were pending, ALPA and

Continental settled the LPP dispute. The Settlement

Agre ement, ultimately approved by the bankruptcy court,

finally resolved all of ALPA's claims including those pursued

in Continental's bankruptcy proceeding and those based on

the enforcement of the LPPs in the Kasher Arbitration.

Under the terms of the ag reement, ALPA agreed to

withdraw its appeals to the district court. The Settlement

Agreement also provided an option to the "pilots formerly

employed by Eastern" who were no longer represented by

ALPA, and who had filed proofs of claim in the bankruptc y

proceeding, to participate in the settlement. Approximately

two

- thirds of these pilots did so.

D. The District Court Proceedings

Prior to the ALPA/Continental settlement, Continental

filed a motion to dismiss ALPA's and the LPP Claimants'

appea ls. Continental argued that the appeals from the

confirmation order were moot because: (1) the plan of

reorganization had been substantially consummated; (2) it

was not feasible for the plan to be undone; and (3) any

1 0

alteration to the plan's fundamental terms would be

inequitable. After the settlement, Continental filed a second

motion to dismiss the appeals as moot, contending that the

LPP Claimants had no individual right to maintain their

claims based o n the LPPs because ALPA, as the exclusive

bargaining representative of the Eastern pilots, had full

authority to settle the LPP grievance. Thus, Continental

argued, the pilots were bound by the settlement agreement.

In a comprehensive memorandum opin ion, the district

court addressed the issues appealed by ALPA and the LPP

Claimants and presented in Continental's motions to

dismiss.6 As to the first motion to dismiss, the court

concluded, inter alia, that ALPA's and the LPP Claimants'appeals rel ating to the claim for administrative priority was

moot. In support of its conclusion, the court emphasized

the substantial consummation of the plan. Specifically, the

court noted that the investment leading to the

consummation of the plan was based on an overall limit on

administrative claims and a determination that ALPA and

the LPP Claimants were not entitled to equitable relief. In re

Continental Airlines, Inc., et al., No. 93

- 163 (D. Del. Nov. 29,

1995). As to Continental's second motion to dis miss as

moot, the court determined that it could not consider the

merits of whether the LPP Claimants had standing under

the LPPs to pursue seniority integration individually.

Specifically, the court concluded that this issue should be

determined by t he arbitrator. Therefore, the court refused

to dismiss their claims based on their alleged lack of

standing to assert the contractual right. Id. at 22

- 25. The

court also rejected Continental's argument that the LPP

Claimants were bound by the ALPA/Cont inental settlement.

Id. at 23.

Turning to the merits of the appeals, the court affirmed

the orders of the bankruptcy court in all respects, except

for the bankruptcy court's injunction of the arbitration

proceedings. Id. at 26

- 45. Relating to the in junction, the

_________________________________________________________________

6. Although the ALPA/Continental settlement agreement provided that

ALPA would dismiss its appeal to the district court, ALPA failed to do so

prior to the district court' s disposition. Ultimately, ALPA did withdraw

its

claims against Continental. ALPA is not a party to this appeal.

11

court concluded that the bankruptcy court's failure to

adequately set forth the reasons for the issuance of the

injunction and to describe the acts restrained in its order,

as mandated by Federal Rule of Civil Procedure 65(d), was

fatal to the validity of the injunction. Id. at 34

- 37. Although

it vacated the injunction, the district court refused to

remand the matter to the bankruptcy court with

instructions to strike the injunction. Rather, the court

concluded that under section 1113 of the bankruptcy code,

the bankruptcy court could not enjoin the arbitration even

if the requirements of Rul e 65(d) were met. Id. at 37

- 40.7

The LPP Claimants appealed the district court's order.

Continental cross

- appealed on the issues of the mootness

of the claims and the dissolution of the injunction. On

appeal, the Group of 31, a group of former Easter n pilots

who previously had been represented by counsel for the

LPP Claimants, have obtained substitute counsel, and havefiled a separate brief. For purposes of brevity, the Group of

31 and the LPP Claimants will be referred to collectively as

"the C laimants" where permissible.

The district court had jurisdiction under 28 U.S.C.

S 158(a). We exercise jurisdiction of the appeal and the

cross

- appeal from the district court's order pursuant to 28

U.S.C. S 158(d).

II.

Our review of the distric t court's determination is

plenary. Brown v. Pennsylvania State Employees Credit

Union, 851 F.2d 81, 84 (3d Cir. 1988); see In re Ionosphere

Clubs, Inc., 922 F.2d 984, 988 (2d Cir. 1990). We exercise

the same review of the district court's decision as that

exercised by the district court. Brown, 851 F.2d at 84. The

bankruptcy court's findings of fact are reviewable only for

clear error. Id. Legal determinations are subject to plenary

review. Id.

_____________________________________________________ ____________

7. The court reached this issue only after determining that in spite of

the

invalidity of the injunction under Rule 65(d), the statutory injunction

under 11 U.S.C. S 524, referenced by the bankruptcy court in its order,

survived. In re C ontinental Airlines, Inc., et al., No. 93

- 163, slip op.

at 37,

(D. Del. Nov. 29, 1995).

12

Before we reach the merits of the parties' claims, we

must address Continental's two challenges to the

Claimants' appeal s contending that the appeals should be

dismissed. First, Continental maintains that the LPP

Claimants' notice of appeal is defective for lack of adequate

identification of the parties to the appeal under Federal

Rule of Appellate Procedure 3(c). Next, Continental argues

that the Claimants' lack standing to assert claims for

individual seniority integration under the LPPs and that the

appeals should be dismissed as moot.

A. Appellate Jurisdiction

Continental requests that the LPP Claimants' app eal be

dismissed pursuant to Federal Rule of Appellate Procedure

3(c) for failure of their notice of appeal to identify each

member of its group participating in this appeal. The notice

of appeal filed by the LPP Claimants simply identifies the

appell ants as "the LPP Claimants." Continental argues that

this identification is insufficient, emphasizing that anumber of the LPP Claimants participated in the

Continental/ALPA settlement and, consequently, waived

their claims on appeal. Continental conte nds that the

notice of appeal did not specify those members who did not

waive their claims and who are appealing from the district

court's order. We reject this argument, and conclude that

the LPP Claimants notice of appeal adequately identifies the

a ppellants.

The requirements of Rule 3(c) are jurisdictional. Torres v.

Oakland Scavenger Co., 487 U.S. 312, 320

- 21, 108 S. Ct.

2405, 2411, 101 L.Ed.2d 285 (1988). In Torres, the

Supreme Court explained that permitting a court to

exercise jurisdictio n over parties not named in a notice of

appeal would be equivalent to extending the time

prescribed to file a notice of appeal, a power not granted to

the court. Id. at 315. Thus, the failure of a notice of appeal

to name a party constitutes a jurisdic tional bar to the

appeal, and thus a failure of that party to appeal. Dura

Systems, Inc. v. Rothbury Investments, Ltd., 886 F.2d 551,

554 (3d Cir. 1989).

Generally, rules of procedure should be liberally

construed. Torres, 487 U.S. at 316. In Torres , the Supreme

13

Court emphasized that, "mere technicalities should not

stand in the way of consideration of a case on its merits."

Id. (internal quotations omitted). Thus, in the context of

Rule 3(c), jurisdict ion may be appropriate if a litigant's

actions are functionally equivalent to the requirements of

Rule 3(c). Masquerade Novelty v. Unique Industries, 912

F.2d 663, 665 (3d Cir. 1990). We have applied this

construction numerous times to support a findin g of

jurisdiction in the absence of strict, technical compliance

with the requirements of Rule 3(c). See id. (where the

contents of documents filed within the time prescribed to

file a notice of appeal contain the information required by

Rule 3(c), th e party will be deemed to have complied with

the rule and the case will not be dismissed for lack of

appellate jurisdiction); Dura Systems, Inc., 886 F.2d at 554

- 55 (Consent Order filed by the appellants within the time

prescribed to file a notice of appeal served as the

"functional equivalent" of what Rule 3(c) required such that

the technical failure of the actual notice of appeal was not

a bar to jurisdiction); see also In re Bertoli, 812 F.2d 136

(3d Cir. 1987) (litigant's filing of a "Notice o f Motion for

Certification of An Interlocutory Appeal" in the district court

within the thirty

- day time period allowed to file a notice of

appeal was sufficient to satisfy Rule 3(c) where the litigant

failed to file an actual notice of appeal; the docu mentcommunicated an intention to appeal and identified the

judgment appealed from and the court to which the appeal

was taken).

The purpose of Rule 3(c)'s identification requirement is to

provide notice to the court and the opposing parties of the

identity of the appellants. Torres, 487 U.S. at 318; Dura

Systems, Inc., 886 F.2d at 555. Since ALPA and the LPP

Claimants filed their appeals in the district court, the LPP

Claimants have been identified as a group of former

Eastern pilots, no longer represented by ALPA, seeking to

enforce their seniority integration rights under the LPPs.

When ALPA settled its claims with Continental, both

Continental and ALPA, via the settlement agreement,

granted the LPP Claimants the opportunity to participate in

the settlement. Continental was well aware of the

individuals who elected to exercise this option. The

settlement agreement specifically required those pilots

14

electing to participate in the settlement to execute one of

two forms indicating an intent to participate in the

settlement and to return the form to Continental. Those

individuals who opted to settle their claims waived their

right to appeal. Thus, the group of LPP Claimants dwindled

to an iden tifiable, discrete entity made up of those

individual pilots who chose not to participate in the

settlement.

The term "LPP Claimants" has been subject to a common

understanding among all parties to this litigation relating to

the individuals compris ing the group. Accordingly, we

conclude that the LPP Claimants' notice of appeal

sufficiently identifies the entity such that Continental, as

well as this Court, is adequately apprised of the identity of

the appellants such that appellate jurisdiction is proper. In

so doing, we follow the Supreme Court's directive to

construe Rule 3(c) liberally and to avoid a construction that

would permit "mere technicalities" to bar the consideration

of this case on the merits. Masquerade Novelty, 912 F.2d at

66 6 (quoting Dura Systems, 886 F.2d at 555).

B. Whether the Claimants' Appeals are Moot

Continental argues that the Claimants' appeals are moot,

relying on ALPA's settlement of its LPP dispute with

Continental. Essentially, Continental maintains that the

claim settled by ALPA was a "group" claim. Thus,

Continental argues, when ALPA settled the dispute, it

settled the claim on behalf of the entire group on whose

behalf it filed the bankruptcy claims, including the Groupof 31 and the LPP Claimants . According to Continental,

then the relevant question is whether "if [individual rights

to seniority integration arbitration under the LPPs] existed

at all, [those] rights survived ALPA's settlement of the group

grievance." In the district court, Cont inental challenged the

LPP Claimants' individual standing under the LPPs to

prosecute their rights to seniority integration. The district

court declined to consider the merits of this argument,

explaining that the issue constituted a "minor" dispute

u nder the Railway Labor Act, 45 U.S.C. SS 151

- 163, and

was subject to the jurisdiction of the arbitrator. We

conclude that because the Claimants' individual rights to

prosecute their claims for seniority integration have not

15

been established under the LPPs, we need not address

whether the Claimants' individual rights to seniority

integration survived ALPA's settlement of the dispute.

The right to seniority integration under the LPPs turns on

whether a "me rger" between Eastern and Continental

occurred within the meaning of the LPPs. This

determination depends on the meaning, interpretation and

proper application of the LPPs. In turn, the issue of

standing to maintain an individual claim for seniority

i ntegration under the LPPs is a "minor" dispute under the

Railway Labor Act, 45 U.S.C. SS 151

- 163. See Consolidated

Rail v. Labor Executives, 491 U.S. 299, 302 (1989) ("major

disputes seek to create contractual rights, minor disputes

to enforce them") ( quoting Elgin, J & E. Ry. Co. v. Burley,

325 U.S. 711, 723, 65 S. Ct. 1282, 1289

- 90, 89 L.Ed. 1886

(1945) (minor disputes are those relating either to the

meaning or proper application of a particular provision with

reference to a specific situation)); Chicago & Northwestern

Transp. v. Local Union 214, 829 F.2d 1424, 1427 (7th Cir.

1987). Accordingly, the issue of standing is subject to the

exclusive jurisdiction of the arbitrator, and the district

court properly concluded that its role relating to this issue

was to protect the jurisdiction of the arbitration board.

Consolidated Rail, 491 U.S. at 304 ("the[National Railroad

Adjustment] Board . . . has exclusive jurisdiction over

minor disputes. Judicial review of the arbitral decision is

limited ."); Chicago & Northwestern Transp., 829 F.2d at

1428.

Consistent with the federal courts' role relating to minor

disputes, i.e., to protect the jurisdiction of the arbitration

board, federal courts cannot inquire into the merits of an

underlying di spute except to the extent necessary to

determine its proper characterization as minor or major.

Chicago & Northwestern Transp., 829 F.2d at 1428. Normay the courts decide what remedy is appropriate if the

agreement is interpreted to require recovery of a remedy.

General Com of Adj., United Transp. Union v. CSX R.R., 893

F.2d 584, 592

- 93 (3d Cir. 1990). Thus, the district court

properly concluded that it could not consider the merits of

Continental's argument that the Claimants did not have

standi ng under the LPPs. As the Claimants' right to

16

prosecute their claims for seniority integration have not

been established under the LPPs, we find that we need not

address Continental's argument that their indiv idual rights

did not survive ALPA's settlement of the LPP dispute.

C. Merits of the Appeal

1. Bankruptcy Court's Jurisdiction

Before we determine whether the bankruptcy court

properly determined the status of the Claimants' claims, we

must addr ess the Claimants' contention that the

bankruptcy court did not have jurisdiction over the matter.

The Claimants maintain that because the LPP dispute arose

wholly outside the bankruptcy context, the matter is a

"non

- core" dispute over which the bankru ptcy court did not

have jurisdiction. The flaw in the Claimants' argument is

that they confuse the disposition of the merits of the

underlying LPP dispute with the treatment of their claims

in bankruptcy. The bankruptcy court had exclusive

jurisdictio n over the latter.

A bankruptcy court has jurisdiction over all "core

proceedings arising under title 11, or arising in a case

under title 11." 28 U.S.C. S 157(b)(1) (1993); In re Wood,

825 F.2d 90, 95 (5th Cir. 1987). Section 157(b) does not

define "core proceedings." However, the phrase has been

interpreted to apply to those rights that are created by

federal bankruptcy law:

If the proceeding involves a right created by the federal

bankruptcy law, it is a core proceeding . . . I f the

proceeding is one that would arise only in bankruptcy,

it is also a core proceeding; for example, the filing of a

proof of claim or an objection to the discharge of a

particular debt.

In re Wood, 825 F.2d at 97. See Beard v. Braunstein, 914

F.2d 434 (3d Cir. 1990) (acknowledging the standard for

"core proceedings" articulated in Wood).

There can be no dispute that the issue as to whether thebankruptcy claim could be satisfied by a monetary award is

a "core ba nkruptcy matter." By filing a proof of claim

against Continental's estate in bankruptcy court, the

Claimants "invoke[d] the special rules of bankruptcy

17

concerning objections to the claim, [and] estimation of t he

claim." Wood, 825 F.2d at 97. Further, the issue decided by

the bankruptcy court was how the claim would be treated

in bankruptcy. Thus, the bankruptcy court was well within

its authority to exercise jurisdiction over the issue of the

status of the bankruptcy claim. Our conclusion is

consistent with principles that govern the disposition of

issues when bankruptcy law and labor law intersect. See

L.O. Koven & Brothers, Inc. v. Local Union No. 5767, 381

F.2d 196, 205 (3d Cir. 1966) ("Questions inv olving an

interpretation of the Bankruptcy Act should be decided by

the court, while questions involving an interpretation of the

collective bargaining agreement should if feasible be

decided by the arbitrator."); see also Garland Coal & Mining

Co. v. United Mine Workers, 778 F.2d 1297, 1304 (8th Cir.

1985) ("Once the arbitrator has decided the liability issue,

the case should be returned to the bankruptcy court to

decide the questions of allowability and priority of claims.").

Accordingly, we conc lude that the bankruptcy court had

jurisdiction to determine whether the Claimants' claims

could be satisfied by a monetary award in lieu of specific

performance.8

_________________________________________________________________

8. For the same rea sons, we reject the Group of 31's efforts to invoke the

Norris

- LaGuardia Act, 29 U.S.C. S 101, et seq., to implicate the

bankruptcy court's jurisdiction to determine how the claims will be

treated in bankruptcy. Section 1 of the Norris

- LaGuardia Act pro vides:

No court of the United States as defined in this chapter, shall

have

jurisdiction to issue any restraining order or temporary or

permanent injunction in a case involving or growing out of a labor

dispute, except in a strict conformity with the provisions of this

chapter; nor shall any such restraining order or temporary or

permanent injunction be issued contrary to the public policy

declared in this chapter.

29 U.S.C. S 101.

The Group of 31 contends that despite the district court's order

vacating the injunction the ruling that the remedy in arbitration can be

"reduced" from full seniority integration to a claim for front pay "is as

clearly an injunction and interference with the Kashe r arbitration as was

the bankruptcy court's blanket injunction against the continuation of thearbitration." The conversion of the equitable remedy to front pay, upon

successful challenge at the arbitration proceedings, only affects the

18

2. Whether the Equitable Remedy Constitutes a Claim

Under the Bankruptcy Code

The LPP Claimants' and the Group of 31's primary

contention on appeal is that the right to the equitable

remedy of seniority integration und er the LPPs cannot be

converted into a claim for money damages. The Claimants

emphasize that they seek specific performance under the

LPPs, and they vehemently argue that the payment of

money damages is not a viable alternative to the equitable

right to seniority integration.

The district court rejected the Claimants' argument,

holding that seniority integration under the LPPs gave rise

to a "right of payment" within the definition of a "claim"

under the bankruptcy code. In support of its conclus ion,

the district court further determined that money damages

are a viable alternative to seniority integration.

The bankruptcy code defines "claim" as

(B) right to an equitable remedy for breach of

performance if such breach gives r ise to a right to

_________________________________________________________________

administration of the claim in bankruptcy. It does not operate to enjoin

the arbitrator, nor does it dictate any particular remedy. Cf. Lukens, 989

F.2d at 677 (order directing an arbitrator not to preside over any newly

ordered arbitration and deeming prior arbitration ineffectual involved

operated as an injunction). Thus, we will not disturb the bankruptcy

court's exercise of jurisdiction over the matter.

Simil arly we reject the Claimants' argument that the determination

whether the equitable remedy can be converted to a payment of money

damages is inconsistent with the district court's conclusion that the

individual right to seniority integration under the L PPs involves a

"minor" dispute, subject to the exclusive jurisdiction of the arbitrator.

See discussion, supra Part II.B. We discern no inconsistency between the

bankruptcy court's exercise of jurisdiction to determine the status of the

bankruptcy clai m and the district court's characterization of the issue of

the Claimants' standing under the LPPs as a "minor" dispute. The

bankruptcy court's ruling related only to the manner in which the

Claimants' claims in bankruptcy would be treated if a right to seniority

integration is established. This ruling, unlike the standing issue, does

not turn on an interpretation of the LPPs. Thus, the bankruptcy court's

determination of the status of the claims and the district court's refusal

to consider the merit s of the standing issue was not inconsistent.19

payment, whether or not such right to an equitable

remedy is reduced to judgment, fixed, contingent,

matured, unmatured, disputed, undisputed, secured,

or unsecured.

11 U.S.C. S 101(5). The term "claim" as defined in the

bankruptcy code is construed broadly to permit debtors to

meet all of their legal obligations in bankruptcy and to

enable holders of claims to participate in the b ankruptcy

proceedings. See Ohio v. Kovacs, 469 U.S. 274, 279, 83

L.Ed.2d 649, 105 S. Ct. 705 (1985) ("Congress desired a

broad definition of claim."); see, e.g., Pennsylvania Dep't of

Public Welfare v. Davenport, 495 U.S. 552, 558 (1990)

(debtors' obl igation to pay restitution as a condition of

probation which arose out of a criminal conviction for

welfare fraud constituted a "debt" within the meaning of the

bankruptcy code that gave rise to a "claim" under the code).

Under section 101(5), an equ itable remedy can be

deemed a "claim" if that remedy "gives rise to a right of

payment." We are guided as to what constitutes a "right of

payment" under the bankruptcy code by the Supreme

Court's analysis in Ohio v. Kovacs. In Kovacs, the

petitioner, the State of Ohio, obtained an injunction

ordering the respondent, William Kovacs, to clean up a

hazardous waste site. After Kovacs failed to comply with the

injunction, the State obtained the appointment of a

receiver, who was directed to take possess ion of all of

Kovacs' assets and property and to clean up the waste site.

Subsequent to the appointment of the receiver, Kovacs filed

for bankruptcy. In response, the State filed a complaint in

bankruptcy seeking a declaration that Kovacs' obligation

under the injunction was not dischargeable in bankruptcy

because it was not a liability on a "claim" under the

bankruptcy code.

The Supreme Court held that the obligation imposed by

the injunction had been converted to an obligation to pay

money tha t was dischargeable in bankruptcy. Kovacs, 469

U.S. at 283. Critical to the Court's conclusion was its

determination that the appointment of a receiver had

dispossessed Kovacs of the property and therefore, had

removed Kovacs' ability to cooperate with the receiver and

20

remove the waste from the site in compliance with theinjunction. Specifically, the Court stated:

The injunction surely obliged Kovacs to clean up the

site. But when he faile d to do so, rather than prosecute

Kovacs under the environmental laws or bring civil or

criminal contempt proceedings, the State secured the

appointment of a receiver, who was ordered to take

possession of all of Kovacs' non exempt assets . . . and

to comply with the injunction . . . . As wise as this

course may have been, it dispossessed Kovacs,

removed his authority over the site, and divested him

of assets that might have been used by him to clean up

the property . . . Although Kovacs had been ordered to

"cooperate" with the receiver, he was disabled by the

receivership from personally taking charge of and

carrying out the removal of wastes from the property.

What the receiver wanted from Kovacs after

bankruptcy was the money to defray cleanup costs . ..

Had Kovacs furnished the necessary funds, either

before or after bankruptcy, there seems little doubt

that the receiver a nd the State would have been

satisfied.

Id. at 283. Thus, the Court concluded that under the

circumstances, the clean up order had been converted into

an obligation to pay money. Id. at 283.

In In re Torwico Electronics, Inc., 8 F.3d 146 (3 d Cir.

1993), we addressed the issue whether a regulatory

obligation directing a Chapter 11 debtor to develop a plan

to ameliorate an ongoing environmental hazard could be

converted into a "claim" in bankruptcy. In that case,

Torwico Electronics, a ma nufacturing business, filed for

Chapter 11 bankruptcy and listed the New Jersey

Department of Environmental Protection and Energy (the

"Department") as a creditor with a disputed and

unliquidated claim. After Torwico filed its petition for

bankruptcy, the Department performed an on

- site

inspection of Torwico's property and found hazardous

waste, for which it issued a notice of violation to Torwico.

Two months later, the deadline for filing proofs of claim in

Torwico's bankruptcy case passed. The De partment had

failed to file any proof of claim by this deadline.

21

The Department, seeking to enforce Torwico's obligation

under state and federal environmental laws, issued an

Administrative Order requiring To rwico to submit a written

closure plan for the hazardous site and assessing a

monetary penalty for failure to take action under the earlier

notice of violation. The Order specifically stated: "Allobligations are imposed pursuant to the police powers o f

the State of New Jersey, intended to protect the public

health, safety, welfare, and environment."

In bankruptcy court, both parties sought summary

judgment. Torwico maintained that the obligation

constituted a "claim" under the bankruptcy code an d that

the State's failure to file a timely proof of claim was fatal to

the State's position that Torwico was responsible for the

obligation. The State, however, argued that the claims

involved were regulatory obligations, not bankruptcy

claims, and t hat Torwico was obligated to remedy the

violations addressed in the Order pursuant to state and

federal law.

Turning our attention to the Supreme Court's analysis in

Kovacs, we explicitly noted that this case was unlike

Kovacs in that the State was not demanding that Torwico

pay money to it, but rather was requesting it to take action

to ameliorate an ongoing hazard. Torwico Electronics, 8 F.3d

at 150. Next, we shifted our focus to the nature of the

obligation imposed by the Order and concluded t hat it was

not an order for breach of an obligation that gave rise to the

right of payment. Specifically, we noted:

The state here found that the seepage pit was a

continuing problem that was leaking hazardous

material into the surrounding environment. Thus, the

state is not asserting a "repackaged claim for

damages"; rather there is an ongoing and continuing

threat and . . . an obligation on the part of the debtor

to "ameliorate ongoing pollution emanating from

accumulated wastes" . . . The state has no "right to

payment" here. What it has is a right to force the

debtor to comply with applicable environmental laws by

remedying an existing hazard.

22

Id. (quoting In re Chateauguay, 944 F.2d 997, 1008 (2d Cir.

1991)).9

Kovacs indicates, and Torwico Electronics implies, that a

right of payment under the bankruptcy code is, essentially,

an obligation to pay money. Thus, the issue we must decide

is whether monetary payment is an alternative for the

equitable remedy of seniority integration. See Matter of

Udell, 18 F.3d 403, 407 (7th Cir. 1994) ("[an] example of a

`claim' is a right to an equitable remedy that can be

satis fied by an `alternative' right to payment"). The district

court answered this question affirmatively, and we agree.We begin our analysis by noting that here, when ALPA

filed its proof of claim in bankruptcy court, it enumerated

the claim as one for money damages, in addition to specific

performance, arising out of the underlying LPP labor

arbitration dispute. Indeed, in its supplemental pre

- hearing

statement filed at the arbitration, ALPA specifically noted

that it sought "damages in the form of back pay and front

pay against . . . Continental . . . in addition to integrated

pilot positions." This is not the end of our inquiry, however.

Consistent with the analyses in Kovacs and Torwico

Electronics, we are compelled to examine the nature of th e

remedy sought and to ascertain whether it can give rise to

a right of payment. We conclude that it does.

Unlike the obligation at issue in Torwico Electronics,

seniority integration is not a remedy tailored to enforce

compliance with any federal o r state laws or regulations.

_________________________________________________________________

9. In Torwico Electronics, we were persuaded by, and explicitly applied,

the approach adopted by the Court of Appeals for the Second Circuit in

In re Chate auguay, 944 F.2d 997 (2d Cir. 1990). In that case, the court

addressed the issue of what constituted a claim in the context of the

bankruptcy of an entity that operated hazardous waste sites. There, the

court stated:

Where an order imposes obl igations distinct from any obligation to

stop or ameliorate ongoing pollution, the order presents a claim if

the government could have done the work itself and then sought

reimbursement; under such circumstances there is a breach of an

obligation that gives rise to a right of payment.

In re Chateauguay, 944 F.2d at 1008.

23

The source of the remedy is a provision contained in an

agreement. By its contractual nature, it is clear th at the

remedy was not created to enforce compliance with any

particular mandate. Rather, by its terms, seniority

integration is a discrete remedy, specifically created to

protect a group of employees.10 Thus, the remedy is a

vehicle by which to provid e a benefit or compensation to

individuals who are covered by the explicit terms of the

agreement and who, by the agreement's terms, are entitled

to enforce the remedy.

Although the collective bargaining agreement is silent as

to the remedy followin g a breach of the agreement, it is

reasonable to conclude that a "corollary right to payment of

liquidated damages" would flow from a breach giving rise to

the equitable remedy under the LPPs. See Matter of Udell,18 F.3d at 408 (holding that a right t o an equitable remedy

for breach of performance is a claim if the same breach also

gives rise to a right of payment with respect to the equitable

remedy or if the right to payment is an alternative to the

right to an equitable remedy). See generally Ch auffeurs,

Teamsters, Etc. v. Terry, 494 U.S. 558, 108 L.Ed.2d 519,

110 S. Ct. 1339 (1990) (claim based on breach of a

collective bargaining agreement is comparable to a breach

of contract claim for which a legal award of money damages

in the form of b ack pay is permitted); Stewart v. KHD Deutz

of America Corp., 75 F.2d 1522 (11th Cir. 1996) (breach of

[collective bargaining claim] claim is most analogous to a

claim for breach of contract). The Court of Appeals for the

Ninth Circuit's opinion in Van Waters & Rogers, Inc. v. Int'l

Brotherhood of Teamsters, 913 F.2d 736 (9th Cir. 1990), is

instructive.

In that case, the court upheld an award of monetary

damages for breach of a contract mandating seniority

integration. There, Van Waters, a seller and distributor of

_________________________________________________________________

10. The LPPs specifically state:

Section 1. The fundamental scope and purpose of the conditions

hereinafter specified are to provide for compensato ry allowances to

employees who may be affected by [a] proposed merger . . . .

(Labor Protective Provisions, section 1).

24

chemicals, purchased its competitor, McKesson. Pursuant

to the acquisition, Van Waters agreed to assume the terms

and conditions of a collective bargaining agreement that

existed between McKesson and its employees' union, Local

70. Although the collective bargaining agreement contained

a seniority integration clause triggered by a purchase or

sale of McKesson, Van Waters refused to honor the terms

of the clause after the purchase was complete. Accordingly,

Local 70 filed a grievance based on Van Waters' failure to

integrate the seniority of the former McKesson employees

with Van Waters' seniority list.

Arbitration of the dispute was complicated by two

additional factors. First, Van Waters maintained a collective

bargaining agreement with another union, Local 287.

Second, the collective bargaining agreement between Local

70 and McKesson/Van Waters contained a clause

precluding the arbitrator from determining any

jurisdictional dispute arising between Local 70 and any

other union. The effect of the latter factor was that anyruling on a jurisdictional dispute would be outside of the

scope of the arbitrator's authority. As seniority integration

of Local 70's employees would affect the seniority of Van

Waters' employees and create a potential conflict between

the two unions, resolution of the dispute implicated the

a rbitrator's authority to resolve the dispute.

At the arbitration hearing, the arbitrator granted Local

70's grievance demanding that the seniority of the former

McKesson employees be considered as integrated. However,

the arbitrator declined to enfor ce seniority integration to

avoid any jurisdictional dispute. Instead, the arbitrator

ruled that the employees would receive damages for any

wages and other benefits lost due to Van Waters' failure to

consider their seniority. In so ruling, the arbitra tor noted

that the Local 70 agreement contained a provision that

permitted the recovery of damages by employees arising out

of an employer's failure to require a purchaser to assume

the obligations of the collective bargaining agreement. The

Ninth Cir cuit upheld the arbitrator's award, concluding that

the arbitrator properly fashioned a monetary award to the

former McKesson employees "for the breach of the terms of

Local 70's collective bargaining agreement." Id. at 742.

25

Van Waters illustrates that a monetary damage award

can be enforced as an alternative to, or can arise with

respect to, the equitable remedy of seniority integration.

The award is not cumulative, nor does it address a separate

remedial concern. Rather, it serves as a substitute for the

performance of an equitable remedy that cannot otherwise

be enforced. See Van Waters, 913 F.2d at 741 ("if violated,

[the seniority rights provided under the collective

bargaining agreement] could be remedied by an award of

damages rather than specific performance.").

We find support for the proposition that monetary awards

are a viable alternative to the equitable remedy of seniority

integration in wrongful discharge cases where we have

enforce d awards of monetary damages in lieu of

reinstatement. Much like reinstatement, seniority

integration is a "make whole" remedy, the purpose of which

is to restore the employee to the economic status quo that

would exist but for the employer's conduct. See Franks v.

Bowman Trans. Co., 424 U.S. 747, 766 (1976).

Although we have recognized that reinstatement is the

preferred remedy to address cases of wrongful discharge,

we have enforced monetary awards as a viable alternative

where reinstatement is impractical. See Maxfield v. Sinclair

International, 766 F.2d 788 (3d Cir. 1985) (front pay is anappropriate alternative to reinstatement where the

relationship between the parties may be so damaged by

animosity that reinstatement is impracticable an d the

remedial purposes of the statute would be frustrated if

front pay were not available as an alternative remedy); Goss

v. Exxon Office Systems Co., 747 F.2d 885 (3d Cir. 1984)

(same); see also Ellis v. Ringgold School District, 832 F.2d

27 (3d Cir . 1987) (reinstatement may be denied when

animosity between the parties makes such remedy

impracticable). Cf. Squires v. Bonser, 54 F.3d 168 (3d Cir.

1994) (special circumstances indicating that tensions

between the parties exceed those which normally

accompany reinstatement or indicating "irreparable"

animosity among the parties involved justifies denial of

reinstatement).11 Similar to the conditions that can result

_________________________________________________________________

11. Squires is distinguishable. That case involved an employee who

challenged the district court's failure to direct reinstatement to his

26

from the enforcement of reinstatement, disruption to the

work environment, irreparabl e damage to work

relationships, and hostility and animosity are all very

probable conditions that can result from the enforcement of

seniority integration. Considering the similarity in purpose

between the two remedies, the rationale underlying the

en forcement of an alternative remedy to fulfill their

remedial purposes, and the similarity in the impracticality

of enforcing the remedies under particular circumstances,

we are certain that a money damage award is an

appropriate alternative to seniorit y integration.

Moreover, we are convinced that the particular

circumstances of this case might make the enforcement of

the equitable remedy of seniority integration impractical

such that an alternative money damage award would be

appropriate. The se niority integration sought by the LPP

Claimants and the Group of 31 could potentially result in

the displacement of many Continental pilots. Such

displacement has the potential to create an environment

rife with hostility and low employee morale, not t o mention

a detrimental effect on employer

- employee relations. 12 The

_________________________________________________________________

former position after a jury sustained a First Amendment constitutional

challenge to his employer's failure to rea ppoint him. Reversing the

district court's decision not to reinstate the employee, we stated, "[t]he

fact that reinstatement might have disturbing consequences, revive old

antagonisms, or breed difficult working conditions usually is not enough

to outw eigh the important first amendment policies that reinstatementserves [absent] probable adverse consequences[that] weigh so heavily

that they counsel the court against imposing this preferred remedy."

Squires, 54 F.3d at 175 (quoting Banks v. Burkich, 7 88 F.2d 1161, 1165

(6th Cir. 1988)). Thus, it is clear that our decision to remand with

instructions to reinstate the appellant was driven by the constitutional

nature of the claims and the compelling need to enforce reinstatement to

remedy the violati on. As the claims here do not involve constitutional

concerns, we cannot conclude that any remedy short of seniority

integration will not suffice to remedy the alleged violation.

12. We note that nothing about the imposition of monetary damages as

a substitute for seniority integration frustrates the remedial purpose of

the LPPs. Cf. Franks, 424 U.S. at 771 (in a Title VII case, "the denial of

seniority relief to victims of illegal racial discrimination in hiring is

permissible `only for reasons wh ich, if applied generally, would not

27

circumstances indicate that seniority integration would not

be a feasible remedy and that an alternative remedy of

monetary damages would be appropriate. Therefore, we

con clude that the right to seniority integration gives rise to

a "right of payment" such that the remedy constitutes a

"claim" dischargeable in bankruptcy.

We take care to note the boundaries of our holding. It is

not our purpose to suggest the award th e arbitrator should

grant, if an award is warranted upon disposition of the LPP

dispute. Our holding is limited to how the claims should be

treated in bankruptcy. Simply put, we hold that any claim

based on an award of seniority integration arising out of the

resolution of the LPP dispute will be treated as a claim in

bankruptcy giving rise to a right of payment. As such, the

right to seniority integration is satisfiable by the payment of

money damages.

D. Arguments of Appellee/Cross

- Appellant Co ntinental

1. Dissolution of the Injunction

Continental challenges the district court's ruling vacating

the injunction against the continuation of the Kasher

Arbitration on two grounds. First, it argues that contrary to

the district court's conclus ion, the permanent injunction,

imposed by the Plan of Confirmation, complied with the

mandate of Rule 65(d).13 Next, it contends that if the

_________________________________________________________________

frustrate the central statutory purposes of eradicating discrimination

throughout the economy and making persons whole for injuries suffered

through past discrimination.' "). Indeed, the LPPs set forth as its scope

and purpose "to provide for compensatory allowances to employees whomay be affe cted by the proposed merger of " the carriers. See discussion

supra note 2. An award of monetary damages is consistent with the

articulated scope and purpose, and is therefore appropriate.

13. Section 12.19 of the plan of reorganization provided:

12.19 Injunction Relating to Eastern Claims . This Joint Plan

permanently enjoins, and the Confirmation Order shall constitute

and provide for a permanent injunction against, any Person or

entity, including without limitatio n, (i) any present or former

employee of Eastern . . . (ii) any labor union or collective

bargaining

representative acting or purporting to act on behalf of any such

28

permanent injunction did not comply with Rule 65(d), the

statutory injunction referenced in the bankruptcy court's

confirmation order survived the permanent injunction and

is valid. We need not decide whether the permanent

injunction failed to comply with the mandate of Rule 65(d)

. We conclude that even assuming that the statutory

injunction survived the permanent injunction and is not

subject to the requirements set forth in Rule 65(d),

Continental's failure to reject the collective bargaining

agreement consistent with the ma ndate of section 1113 of

the Code renders the injunction invalid.

The Confirmation Order issued by the bankruptcy court

specifically incorporated the statutory injunction prescribed

by the bankruptcy code. The order states:

In accordance wi th section 524 of the Bankruptcy Code

. . . this Order:

(ii) operates as an injunction against the

commencement or continuation of an action, the

employment of process, or an act, to collect, recover or

offset any such debt or Claim as a personal liability of

the Debtors . . . .

(Findings of Fact, Conclusions of Law and Order

Confirming The Debtors' Revised Second Amended Joint

Plan of Reorganization).

__________________________________________________ _______________

employees or former employees . . . from commencing, conducting or

continuing any suit, arbitration, action or other proceeding in any

place or forum against any Debtor, . . . This injunction shall

apply,

w ithout limitation, to any suit, arbitration, action or proceeding.(Debtors' Revised Second Amended Joint Plan of Reorganization,

S 12.19).

Federal Rule of Civil Procedure 65(d) states:

Every order granting an injunction and every restrain ing order

shall

set forth the reasons for its issuance; shall be specific in terms;

shall describe in reasonable detail, and not by reference to the

complaint or other document, the act or acts sought to be

restrained. . . .

Fed.R.Civ.P. 65(d).

29

Assuming, as the district court did and as Continental

argues, that the section 524 statutory injunction is not

subject to the requirements of Rule 65(d), we conclude that

the district court properly vacated the injunction against

the Kasher Arbitration. Section 1113 of the Code provides:

(a) The debtor in possession, or the trustee if one has

been appointed under the provisions of this chapter

. . . may assum e or reject a collective bargaining

agreement only in accordance with the provisions of

this section.

11 U.S.C. S 1113(a). The provision outlines the procedure

that a debtor or appointed trustee must follow to

successfully reject a col lective bargaining agreement,

including, but not limited to: (1) the submission of a

proposal to an authorized representative of the employees

affected by the terms of the agreement prior to thefiling of

an application to reject the agreement, 11 U.S.C

. S 524(b)(1)(A); and (2) good faith attempts to reach a

"mutually satisfactory modification" of the agreement, 11

U.S.C. S 524(b)(2).

The intent behind section 1113 is to preclude debtors or

trustees in bankruptcy from unilaterally terminating,

al tering, or modifying the terms of a collective bargaining

agreement without following its strict mandate. In re

Ionosphere, 922 F.2d at 989

- 90. Moreover, the provision

operates to preclude the application of other bankruptcy

code provisions to the adva ntage of debtors and trustees to

permit them to escape the terms of a collective bargaining

agreement without complying with the requirements of

section 1113. See id.

Continental does not dispute that it did not follow the

requirements set forth in section 1113 to reject thecollective bargaining agreement. Instead, Continental

suggests that the imposition of the injunction was

consistent with the bankruptcy court's authority to

determine the administrative priority and status of the

bankruptcy claims. Thus, it argues, section 1113 cannot

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divest the bankruptcy court of jurisdiction to exercise this

authority and impose the injunction. We disagree. 14

The injunction allowed Continental to avoid its obligation

to arbitrate the merger dispute under the LPPs. In In re

Ionosphere, the Court specifically held that the application

of the section 362 automatic stay provision to effectuate

this result in the absence of the debtor's compliance with

the r equirements of section 1113 was impermissible, as "its

application would allow a debtor unilaterally to avoid its

obligation to arbitrate." In re Ionosphere, 922 F.2d at 993.

Here, the enforcement of the statutory injunction in the

face of Continental' s failure to follow the requirements of

section 1113 is no different. As the enforcement of the

injunction would have the effect of permitting Continental

to escape its duty to arbitrate under the collective

bargaining agreement, we decline to enforce the statutory

injunction in the absence of Continental's compliance with

the requirements to reject the collective bargaining

agreement.15

2. Duty to Arbitrate

Finally, we reject Continental's argument that it has no

duty to arbitrate the LPP di spute. Throughout this

litigation, Continental has premised its arguments on the

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14. We have not been required previously to address the applicability of

arbitration under collective b argaining agreements when the employer is

in bankruptcy, although the issue was raised in a case we decided last

year. See Antol v. Esposto, 100 F.3d 1111, 1121 n.4 (3d Cir. 1996) ("[W]e

need not decide that interesting issue here."). This case, however

, requires us to do so.

15. Despite our conclusion that failure to comply with section 1113 bars

an injunction of the arbitration, we reject the Claimants' contention that

the substitution of a monetary damage award, in lieu of seniority

integration , is not permitted under section 1113 because it alters or

modifies the terms of the collective bargaining agreement. The

bankruptcy court's determination of the administrative priority and

status of the claims was not based on an interpretation of the LPPs. Nor

did it predetermine the appropriate remedy warranted under the LPPs,

thus "nullifying" the agreement and infringing on the arbitrator'sjurisdiction. Substitution of the equitable remedy in no way amounts to

an alteration or termination of th e terms of the collective bargaining

agreement.

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assumption that it is bound by the LPPs and has a duty to

arbitrate the LPP dispute. In so doing, Continental reaped

enormous benefits: (1) it was able to obtai n a ruling that

the claim based on seniority integration could be treated as

a right to payment in bankruptcy, satisfiable by a monetary

award; and (2) in turn, it received backing from investors

for its plan of reorganization, which was critical to pl an

confirmation by the bankruptcy court.16 Now, Continental

maintains that there has been no determination that it is

bound by the LPPs and that the case should be remanded

to the district court for a determination on the merits of its

duty to arbitr ate the dispute.

In light of the overwhelming advantage that Continental

derived from maintaining the position that it was bound by

the collective bargaining agreement, and thus, had a duty

to arbitrate the LPP dispute, we refuse to allow Continental

to repudiate that representation and return to the district

court to litigate the issue whether it is bound by the

agreement. See EF Operating Corp. v. American Bldgs., 993

F.2d 1046, 1050 (3d Cir. 1993) ("one cannot casually cast

aside representatio ns, oral or written, in the course of

litigation simply because it is convenient to do so . . . a

reviewing court may properly consider the representations

_________________________________________________________________

16. It is apparent that Cont inental assumed this position in efforts to

obtain judicial confirmation of its plan of reorganization. In its Motion

for

Partial Summary Judgment, Continental stated:

1. [Debtors] make this Motion For Partial Summary Judgment On

Their Partial Objection to Claims Based On Certain Alleged Labor

Protective Provisions Involving The Air Line Pilots Association,

International ("ALPA") And Eastern Air Lines, Inc. ("Eastern") in

order to ensure that they will be able to reorganize successfully

and,

more specifically, to satisfy a condition of the Investment

Agreement

dated November 9, 1992 ("Investment Agreement"), by and among

[the investors] and the Debtors. In addition to monetary damages,

these claims seek to require Continental to hire several thousand

Eastern Air Lines pilots, which if granted would necessitate the

displacement of an equal number of incumbent Continental pilots.

Debtors seek in this Motion a leg al determination that the "LPP

Claims" . . . are, at best, dischargeable, prepetition generalunsecured claims within the meaning of the Bankruptcy Code

Section 101(5).

32

made in the appell ate brief to be binding as a form of

judicial estoppel, and decline to address a new legal

argument based on a later repudiation of those

representations."). Accordingly, we conclude that

Continental is bound by its prior representations that it has

a duty to arbitrate the LPP dispute.

III.

For the foregoing reasons, we affirm the district court's

decision in all respects.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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