1 14-1006-cv Scerba v. Allied Pilots Ass’n UNITED STATES COURT OF APPEALS FOR THE SECO ND CIRCUIT SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AF TER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROC EDURE 32.1 AND THIS COURT = S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPEND IX OR AN ELECTRONIC DATAB ASE (WITH THE NOTATION

A SUMMARY ORDER @ ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Seco nd Circuit, held at the Thurgood Marshall United Stat es Courthouse, 40 Foley Sq uare, in the City of New York, on the 1 st day of October, tw o thousand fourteen. PRESENT: RALPH K. WINTER, REENA RAGGI, PETER W. HALL, Circuit Judges.

---------------------------- ---------------------------- -------------- LARRY SCERBA, WILLIAM A. ALEXANDER, JOHN BABUINI, DONALD BICKELMANN, KEITH BJORNDAL, GEORGE MARTIN BLACK, RANDALL T. BLAIR, H. WITNEY BOGGS, III, PORTER B. CALHOUN, MARK G. CLAY , TERENCE G. CONLEY, KENNETH R. CURRY, PHILIP M. DEAN, ANTHONY W. DRIZA, LAWRENCE FUCHS, RONALD H. GERTSEN, WILLIAM J. GRACE, ROGER L. GRAYSON, EDWARD C. GUNDERSON, MARVIN J. HAMM, JOHN L. HARPER, CLYDE HECKERT, CHARLES HENDERSON, THOMAS J. HENION, GREGORY W. HINCHLIFFE, HENRY R. HITPAS, RONALD D. HOSKINS, JENS H. HOYT, STEVEN P. JOHNSON, TIMOTHY F. KALCEVIC, RICHARD A. KATTERICH, KARL B. KATTREIN, KENNETH C. KIRKPATRICK, DALE J. KR USE, RICHARD J. LEVY, THOMAS LOMBARDO, CHRIS P. MARSHALL, HARRY H. MATARAS, JAMES MATEOS, GREGG E. MAXWELL, JR., GLENN D. MAYNARD, DON L. MORRE, JAMES W. MURDOC H, III, STEVEN C.2 NELSON, J.E. PERRY, KE TH J. POOL, REGINALD PRZYBYL, JOHN PURIFOY, BILLIE J. RAHM, RICHARD A. RALPH, KENNETH H. RITZENTHALER, EDWIN C. ROBERTS, RONA LD R. ROGERS, ALBERT A. ROOK, SCOTT W. RUSS ELL, ROBERT B. SALA, MICHAEL B. SHANHOLTZ, GARY M. SHEPPARD, THOMAS G. SAINT DENIS, ANDREW R. STEINBECK, SCOTT J. STOW, ROBERT N. SWACKER, TIMOTHY W. SWANSON, TERRY S. THAMES, WILLIAM J. THAMS, BARRY TRUDEAU, DENIS P. WALSH, WAYNE E. WEYER, THOMAS K. WIEHL, III, Plaintiffs-Appellants,

v. No. 14-1006-cv ALLIED PILOTS ASSOCIATION, Defendant-Appellee.

-------------------------------------- -------------------------------- APPEARING FOR APPELLANTS: NIC HOLAS GRANATH (Stanley J. Silverstone, on the brief ), Seham, Seham, Meltz & Petersen, LLP, White Plains, New York.

APPEARING FOR APPELLEE: DARIN M. DA LMAT (Edgar N. James, Steven K. Hoffman, on the brief ), James & Hoffman, P.C., Washington, D.C. Appeal from a judgment of the United States District Court for the Southern District of New York (Lewis A. Kaplan, Judge ; Andrew J. Peck, Magistrate Judge ). UPON DUE CONSIDERATION, IT IS HEREBY ORDERE D, ADJUDGED, AND DECREED that the judgment entere d on April 23, 2013, is AFFIRMED. Plaintiffs, who are pilots employed by Am erican Airlines, Inc., and represented by

defendant Allied Pilots Associa tion (“APA”), appeal from the dism issal of their claims that APA breached its duty of fair representation implied under the National Labor Relations Act, see Kalyanaram v. Am. A ss’n of Univ. Professors at th e N.Y. Institute of Tech., 7423 F.3d 42, 46 (2d Cir. 2014), and violated plaintiffs’ statutory right to arbitration under the Railway Labor Act (“RLA”), see 45 U.S.C. § 151, et seq. We review de novo the dismissal of a complaint under Fed. R. Civ. P. 12(b)(6), accepting all factual allegations as true and drawing all reasonable inferences in favor of the pl aintiffs. See Kalyanaram v. Am. Ass’n of Univ. Professors, 742 F.3d at 46; Askins v. Doe No. 1, 727 F.3d 248, 252–53 (2d Cir. 2013). We assume the parties’ fam iliarity with the fact s and the record of underlying proceedings, which we reference onl y as necessary to explain our decision to

affirm.

1. Fair Representation Claims Plaintiffs allege that the APA breached its fair representation duty in four ways: (1) failing to defend Supplement B to th e previously existing Collective Bargaining Agreement (“CBA”) in American Airlines’s bankruptcy proceedings, (2) agreeing with American Airlines not to oppo se its efforts to abrogate Supplement B, (3) supporting elimination of the option to receive lump-sum distribution of benefits, and (4) agreeing with American Airlines to extinguish member grievances without consent. The only question on appeal is whether these claims are timely. A duty of fair representation claim has a six-months’ limitations period, and a “ cause of action accrues no later than the time when plaintiffs knew or reasonably should have known that such a br each of the duty of fair representation had occurre d, even if some possibility of nonjudicial enforcement

remained.” Cohen v. Flushi ng Hosp. & Med. Ctr., 68 F.3d 64, 67 (2d Cir. 1995) (internal quotation marks and alteration omitted); acco rd Kalyanaram v. Am. Ass’n of Univ.4 Professors, 742 F.3d at 46. Because plaintiffs filed their complaint on May 31, 2013, their

claims must have accrued on or after December 1, 2012 to be timely. Plaintiffs argue that their claims conc ern the formation of a contract—the new CBA—and, therefore, are timely because breach cannot occur for claims of this nature

until the contract at issue becomes effective. Plaintiffs’ own complaint, however, belies this argument. Their first two allegations of breach concern APA’s failure to defend existing contractual rights under Supplement B, not the unfairness of provisions contained in the new CBA, which became e ffective on December 7, 2012. Pl aintiffs first allege that APA failed to defend the validity of Supple ment B when American Airlines moved for leave to reject the then-existing CBA (inc luding Supplement B) under § 1113 of the Bankruptcy Code, despite Supplement B’s express defense requirements. 1 Plaintiffs next allege that APA agreed not to oppose American Airlines’s ef forts to abrogate Supplement B. We reject plaintiffs’ attempt now to recast claims so clearly pleaded on their face to reference existing contract rights. Because plaintiffs knew of APA’s failure to defend these rights prior to December 1, 2012, their claims must be deemed untimely. See Ramey v. Dist. 141, Int’l Ass’n of Machin ists & Aerospace Workers, 378 F.3d 269, 280 (2d Cir. 2004) (holding that dut y of fair representation claim “accrued on the date on which performance was due”). 2

1 Supplement B states in part that neither American Airlines nor APA “shall challenge, contest, or question the legality, validity, or enforceability of [Suppl ement B]” and instead “shall participate in defending the legality, valid ity, and enforceability of [the agreement] in any judicial, administrative, or other proceeding.” J.A. 65.

2 Our timeliness conclusion is reinforced by the fact that, prior to th e final CBA agreement,5 Plaintiffs’ third allegation of breach—APA’ s agreement to elimin ate the option of a lump-sum benefit—is also properly construed to complain of union failure to defend its members’ then-existing rights and not the unfairness of the new CBA. See, e.g., Compl. ¶¶ 138–39, J.A. 55 (stating that APA’s suppor t for elimination of lump-sum benefit was

“in direct violation of its s ubstantive and procedural commitm ents that it would take no action to diminish the pay or be nefits of the Supplement B Pilots” and “in clear violation of its obligation to defend” Supplement B in any proceedings). Nevertheless, assuming arguendo that this pleading can be read to allege a breach of APA’s duty in negotiating the new CBA, plaintiffs knew of APA’s purportedly breaching action prior to December 1, 2012. See Ghartey v. St. John’s Queens Ho sp., 869 F.2d 160, 165 (2d Cir. 1989) (“[A] breach of duty by the union is apparent to the member at th e time she learns of the union

action or inaction about which she complains.”); ac cord Cohen v. Flus hing Hosp. & Med. Ctr., 68 F.3d at 68. Indeed, we have held th at where a union member alleges union failure to represent him in arbitration, his claim accr ues not when arbitratio n begins but when the union “manifestly oppose[s] and reject[s] his interests by an nouncing . . . that [it will] not press [his] rights.” Buttry v. Gen. Signal Corp., 68 F.3d 1488, 1493 (2d Cir. 1995). Thus, when, on August 20, 20 12, APA submitted comments in support of a proposed IRS regulation that would allow American Airlines, as a debtor in bankruptcy, to eliminate the lump-sum option for plaintiffs, it was clear not only that APA “manifestly opposed and rejected” plaintiffs’ interests, but also that it had taken affirmative action against those

plaintiffs filed in the bankruptcy court objec tions arguing that APA’s failure to defend Supplement B violated its duty of fair representation.6 interests. Ramey v. Dist. 141, Int’l Ass’n of Machinists & Aerospace Workers, 378 F.3d at 278 (“[T]he breach occurs wh en the union acts against the interests of its members.”). Accordingly, because plaintiffs do not allege that they lacked cont emporaneous knowledge of APA’s actions, this aspect of their fa ir representation claim accrued well before December 1, 2012. The same conclusion obtains as to plainti ffs’ fourth allegation of breach. Unlike the preceding allegations, it links to the ne w CBA rather than its predecessor and Supplement B in that it charges APA with agreeing to extinguish member grievances without consent through the new CBA. Nevertheless, this alleged breach of APA’s duty of fair representation occurred on November 16, 2012, when APA’s Board of Directors voted to approve the new CBA agreement-in-p rinciple as a tentative agreement. By agreeing in negotiations with American Air lines to extinguish me mber grievances, APA took an action adverse to plaintiffs’ interest a nd did not simply state a future intention to do so. See id. at 278–80 (holding that claim “accrued on the date on which performance was due, namely the date on which [the union] advocated a positi on on [a conteste d position] to [the employer]” and not when members receiv ed memorandum from union stating it would take a certain position in negotiations). While a final agreement may in certain circumstances evidence breach of a duty of fair representation, see Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 78 (1991), that does not mean, as plain tiffs assert, that the statute of limitations begins to run only upon a final agreement. Rather, as this court has explained, ratification of an a llegedly violative agreement is “t he latest” date on which the7 statute of limitations for a duty of fair representation claim ca n begin to run. Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100, 1106 (2d Cir. 1991).

Plaintiffs nevertheless contend that thei r claims could not have accrued until the new CBA was ratified because prior to that action all harm was speculative. This misstates controlling law. While we have held that a claim does not accrue when there is

“substantial doubt as to the likelihood of an ensuing harm,” we have at the same time stated

that “the harm that results from the union’s br each need not be beyond all doubt for a cause of action to accrue.” Ramey v. Dist. 141, Int’ l Ass’n of Machinists & Aerospace Workers, 378 F.3d at 278; see also Cohen v. Flushing Hosp. & Med. Ctr., 68 F.3d at 68 (“Even if [plaintiff] entertained hopes of future representation by the Union . . . knowledge [that the union had done nothing to purs ue his grievance] was sufficient to start the statute of limitations running.”). We have not yet delineat ed “how certain it must be that harm will be caused by a union’s breach to trigger the st atute of limitations,” Ramey v. Dist. 141,

Int’l Ass’n of Machinists & Ae rospace Workers, 378 F.3d at 280 n.5, nor need we do so here. On September 5, 2012, the bankruptcy court issued an order pursuant to § 1113 of the Bankruptcy Code authorizin g American Airlines to reje ct the existing CBA, including Supplement B. Once Supplement B was thus ab rogated, see In re Nw. Airlines Corp., 483 F.3d 160, 173 (2d Cir. 2007) (holding that de btor “authorized by the bankruptcy court acting pursuant to § 1113 to reject its CBA and impose new terms abrogates its CBA” (emphasis in original)), the harm from APA’s a lleged failure to defend that provision and from its support for elimination of certain su bstantive benefits contained in Supplement B was more certain than speculative, particularly in light of clear indications that neither8 American Airlines nor APA would seek to rein state the Supplement’s substance in the new CBA. Indeed, by December 1, 2012, APA and American Airlin es had agreed to the terms

of a new CBA. While the new CBA still faced a ratification vote a nd required bankruptcy court approval, we have never held that such contingencies preclude accrual where, as here, the likelihood of such action was gene rally anticipated. Cf. Addington v. U.S. Airline Pilots Ass’n, 606 F.3d 1175, 1178–80 (9th Cir. 2010) (holding fair representation claim not ripe because harm too speculative where unclear whether employer would agree to and union would ratify proposal). In su m, given the circumstances alleged, the contingencies remaining here di d not raise “substantial doubt” as to whether the alleged harm would occur, and, therefore, plaintiffs’ claims accrued before December 1, 2012.

2. Violation of the Statutor y Right to Arbitration Insofar as plaintiffs argue that their RLA claim is timely because their fair representation claim is timely, the argument fails for the reasons just stated. In the alternative, plaintiffs argue that the RLA itself affords them a “two-year limitations period.” Appellants’ Reply 1. Plaintiffs failed to raise th is argument to the magistrate judge, as the magistrate judge explicitly noted , see Scerba v. Allied Pilots Ass’n, No. 13 Civ. 3694 (LAK) (AJP), 2013 WL 6481583, at *15 n.27 (S.D.N.Y. Dec. 10, 2013) (report and recommendation), and as pl aintiffs concede on appeal, see Appellants’ Br. 55. We therefore deem this argument forfeited. See Allianz Ins. Co. v. Le rner, 416 F.3d 109, 114 (2d Cir. 2005) (“[I]t is a well- established general rule that an appellate court will not

consider an issue raised for the first time on appeal.” (quotation marks omitted)); see also Knight v. Thompson, 723 F.3d 12 75, 1277 n.1 (11th Cir. 2013) (stating that argument first9 raised in objections to magistrate judge’ s report and recommendation and not addressed by district court is forfeited). Accordingly, we conclude that plainti ffs’ complaint was corre ctly dismissed as untimely. We have considered plaintiffs’ remaini ng arguments and conclude that they are

without merit. We therefore AFFIRM the judgment of the district court.

FOR THE COURT: CATHERINE O’HAGAN WOLF E, Clerk of Court