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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

EUGENIO VARGAS,

 Plaintiff/Counterclaim Defendant,

v.

ASSOCIATION OF PROFESSIONAL 

FLIGHT ATTENDANTS, et al., 

 Defendants/Counterclaim Plaintiff.

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 Civil Action No. 4:22-cv-430-Y

 Judge Terry R. Means

AMENDED ANSWER OF THE

ASSOCIATION OF PROFESSIONAL FLIGHT ATTENDANTS,

JULIE HEDRICK AND ERIK HARRIS

and

AMENDED COUNTERCLAIM OF THE APFA

Defendants the Association of Professional Flight Attendants (“APFA”), APFA National 

President Julie Hedrick and APFA National Treasurer Erik Harris (collectively herein, 

“Defendants”) hereby Answer Plaintiff’s Amended Complaint (doc. 55-1) and APFA asserts its

Amended Counterclaim against Eugenio Vargas.

Pursuant to Rule 8, Fed. R. Civ. P., the Defendants respond to the numbered paragraphs 

of the Amended Complaint as follows:

1. Defendants admit that Plaintiff asserts claims under the cited federal law and 

various state laws, but deny that any “unlawful union practices”, torts or other violations of law 

or contract occurred with regard to Mr. Vargas as alleged in the Amended Complaint.

2. Admitted.

3. Admitted.

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4. Admitted.

5. Admitted.

6. Admitted.

7. Defendants admit that Plaintiff brings a claim under the Labor Management 

Reporting and Disclosure Act, but denies the remainder of the allegations in this paragraph.

8. Denied.

9. Denied.

10. Defendants admit that Bob Ross was elected APFA National President in 2016, 

and lack knowledge sufficient to admit or deny the remaining allegations of this paragraph.

11. Defendants admit that Mr. Vargas was elected APFA National Treasurer, but deny

the remaining allegations in this paragraph.

12. Defendants admit the allegations in this paragraph except to state that they lack 

knowledge sufficient to admit or deny the assertion that Mr. Vargas “supported the National

President.”

13. Defendants admit that in 2019, APFA members Chinery-Burns and Lee undertook 

an investigation into Mr. Ross and his administration, including Mr. Vargas. Defendants deny the 

remaining allegations in this paragraph.

14. Defendants admit that members Chinery-Burns and Lee were allowed to view 

certain APFA financial records pursuant to their request, but deny that these records included any 

“private” or “personal” documents as alleged in this paragraph. The remaining allegations in this 

paragraph are also denied.

15. Defendants admit that charges under Article VII of the PAFA Constitution were 

filed against Mr. Vargas in September 2019, and were determined to be untimely. Defendants 

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admit that in November 2020 different charges were filed and were determined to be timely, 

specific and valid and resulted, after a full hearing, in an arbitration award by a neutral arbitrator.

16. Defendants refer the Court to the text of the APFA Policy Manual and 

Constitution for its terms, and otherwise deny the allegations of this paragraph.

17. Defendants admit that charges were brought by members Chinery-Burns and Lee 

against Mr. Vargas, and refer to the charging document for a complete statement of its contents.

18. Defendants admit that they retained an independent accounting firm regarding 

overpayments to Mr. Ross and others in his administration, but deny the remaining allegations in 

this paragraph.

19. Denied.

20. Denied.

21. Defendants refer the Court to Article VII of the APFA Constitution for a complete 

statement of the procedures thereunder, and otherwise deny Plaintiff’s characterization thereof.

22. Defendants refer the Court to Article VII of the APFA Constitution for a complete 

statement of the procedures thereunder, and otherwise deny Plaintiff’s characterization thereof.

23. Defendants deny the allegations in this paragraph except to admit that charges 

were filed in September 2019 and were found to be untimely, and that charges were filed again in 

November 2020 and were found to timely and became the subject of an Article VII arbitration.

24. Denied.

25. Denied.

26. Denied.

27. Denied.

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28. Defendants incorporate their responses to paragraphs 1-27 as their response to this 

paragraph.

29. Paragraph 29 states a legal conclusion to which no response is required.

30. Paragraph 30 states a legal conclusion to which no response is required.

31. This first sentence of paragraph 31 states a legal conclusion to which no response 

is required. Defendants deny the allegations in the second sentence of this paragraph.

32. Denied.

33. Denied.

34. Denied.

35. Denied.

36. This paragraph states a legal conclusion to which no response is required, but to 

the extent a response is required, Defendants deny the allegations of this paragraph.

37. This paragraph states a legal conclusion to which no response is required, but to 

the extent a response is required, Defendants deny the allegations of this paragraph.

38. This paragraph states a legal conclusion to which no response is required.

39. This paragraph states a legal conclusion to which no response is required, but to 

the extent a response is required, Defendants deny the allegations of this paragraph.

40. Denied.

41. Defendants incorporate by reference their responses to each of the preceding

paragraphs.

42. Admitted.

43. Denied.

44. Denied.

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45. Denied.

46. Denied.

47. Denied.

48. Defendants incorporate by reference their responses to each of the preceding

paragraphs.

49. Denied.

50. Denied.

51. Denied.

52. Denied.

53. Denied.

54. Denied.

Defendants further deny all allegations in the remaining unnumbered paragraphs of the 

Amended Complaint , and specifically deny that Plaintiff is entitled to any of the relief sought, or 

that he suffered any damages or other harm whatsoever.

AFFIRMATIVE DEFENSES

1. This Court lacks subject-matter jurisdiction over Plaintiff’s claims.

2. The Amended Complaint fails to state a claim upon which relief may be granted.

3. The individual Defendants, elected union representatives, are not liable to 

Plaintiff for actions taken in their official capacity.

4. Plaintiff has failed to exhaust mandatory internal union remedies prior to filing 

suit.

5. Plaintiff’s state-law claims are preempted by federal law.

6. Plaintiff’s claims are barred by final and binding arbitration decisions.

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7. Plaintiff’s claim for injunctive relief is barred by the doctrine of unclean hands.

8. Plaintiff has failed to plead fraud with particularity.

9. Plaintiff did not rely on any alleged misrepresentations to his detriment.

9. Plaintiff’s challenge to the Article VII Arbitration is barred by the doctrine of 

waiver.

10. The Article VII Arbitration fully complied with the requirements of the LaborManagement Reporting and Disclosure Act.

FIRST AMENDED COUNTERCLAIM

This First Amended Counterclaim is brought by the Association of Professional Flight 

Attendants (APFA”) pursuant to Section 501 of the Labor Management Reporting and 

Disclosure Act (“LMRDA”), 29 U.S.C. § 501, against Eugenio Vargas for breach of the

fiduciary duty he owed while serving as APFA National Treasurer. APFA seeks to recover all 

amounts awarded by the arbitrator in a final and binding arbitration in which Mr. Vargas was 

found to have improperly expended and received union funds in violation of his fiduciary duty.

In addition, the APFA seeks its costs and attorney’s fees incurred in bringing this action.

JURISDICTION

1. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 

1367; and 29 U.S.C. § 501.

PARTIES

2. The APFA is a labor organization which serves as the exclusive collective 

bargaining representative of the Flight Attendants employed by American Airlines, Inc.

3. Eugenio Vargas is an APFA member who served as National Treasurer of APFA 

from April 2016 to July 2018.

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ALLEGATIONS

4. The APFA represents over 25,000 Flight Attendants employed by American 

Airlines, throughout the United States, pursuant to the Railway Labor Act. The internal affairs of 

APFA are governed by the LMRDA, 29 USC § 401 et. seq., a written Constitution and Policy 

Manual, which are binding on the APFA, its officers and members.

5. Pursuant to the APFA Constitution, the duties of the APFA National Treasurer, 

both now and during the tenure of Mr. Vargas, included that they “shall be responsible for the 

care and custody of the funds ... of the APFA.” 

5. Under federal law, union officers “hold positions of trust” and owe a fiduciary 

duty to the union and its membership as a group. That duty includes “the duty ..., taking into 

account the special problems and functions of a labor organization, to hold its money ... solely 

for the benefit of the organization and its members and to ... expend the same in accordance with 

its constitution and bylaws.” 29 U.S.C. § 501(a).

6. The APFA’s Constitution, which Mr. Vargas swore an oath to uphold, contains, in 

Article VII, a process for union members to challenge misconduct by elected officers as well as 

other union members. Among the grounds on which a member may file charges are “Theft or 

embezzlement of Association monies or property” and “Willful violation of an express Article of 

this Constitution, or of a proper and express written resolution or policy of the [APFA] Board of 

Directors or the Executive Committee.” 

7. To seek internal adjudication of such allegations, a member may file written 

charges against another member with the APFA, which filing triggers a series of steps including

review by the APFA’s Executive Committee for “timeliness, specificity and validity.” Should the 

Executive Committee determine that these threshold elements are satisfied, the charges must then 

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be forwarded to a neutral “Article VII Arbitrator.” That Arbitrator “shall have power to resolve 

all charges referred to him/her,” including the power to determine the timeliness and validity of 

charges, as well as to dismiss charges either upon motion or even without a hearing. The 

Arbitrator’s decision is “final and binding upon the accused and the accuser.” Art. VII, §§ 3, 6.

8. APFA’s Policy Manual sets out in detail the procedures for Article VII 

arbitrations, and includes a requirement that parties exchange documents and witness lists in 

advance of the hearing; a provision for the subpoenaing of witness and documents “upon the 

request of any party;” and for the creation of a stenographic record of proceedings. 

9. In November 2020, two rank-and-file APFA members, Melissa Chinery and 

Sandra Lee, filed Article VII charges against Mr. Vargas, based on Mr. Vargas’s actions while 

serving as APFA National Treasurer. The charges included: violations of APFA’s “Meal Expense 

Policy”; failure to maintain an inventory of union assets; allowing himself and other officers to 

receive “inflated” payouts of sick leave and vacation when exiting office; and violating APFA 

credit card policy. The charges were found by the APFA Executive Committee to be “timely, 

specific and valid,” and were therefore assigned to Article VII Arbitrator Ruben Armendariz. 

Mr. Armendariz is a distinguished Neutral with over two decades of experience as a labor

arbitrator. He also sits on the prestigious Board of Governors of the National Academy of 

Arbitrators. 

10. Arbitrator Armendariz held hearings on the charges against Mr. Vargas over three 

days in September 2021. Each side submitted documentary evidence and testimony, including 

seven witnesses who testified on behalf of Mr. Vargas. Each side submitted post-hearing briefs 

as well, after which the Arbitrator issued a 39-page written decision. 

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11. Arbitrator Armendariz adopted Mr. Vargas’s argument regarding the appropriate 

standard under the APFA Constitution regarding Article VII charges, and held that “in order for 

the Plaintiff to meet its burden of proof, it must not only be a ‘willful’ violation, but such proof 

must be supported with clear and convincing evidence.” 

12. Applying that standard, the Arbitrator then assessed each category of charges

brought against Mr. Vargas. Two categories of charges were dismissed, two were held to “have 

merit”; and one was “remanded” to APFA to conduct an audit of Mr. Vargas’s credit card 

charges. More specifically, the Arbitrator concluded that “Vargas did fail in his fiduciary duty as 

National Treasurer to prepare an inventory list to maintain union assets”, and also “violated his 

fiduciary duty” by “attempt[ing] to benefit monetarily ... by willfully changing the formula for 

... payouts” to himself and fellow officers and “it is clear Vargas manipulated the payout

formula.” 

13. Arbitrator Armendariz included in his order that “Vargas is prohibited from 

serving in any APFA National Officer position or Regional Officer position for life,” and ordered 

him to repay APFA for half of the Arbitrator’s fee. In addition, the Arbitrator ruled that “Vargas 

is ordered to repay APFA for all meals he charged to the APFA credit card” if the independent

audit determines that such expenses were “for his own personal use on meals.” 

14. APFA then retained a CPA firm to conduct a financial review of the credit card 

expenditures and submitted their report to Arbitrator Armendariz, who subsequently issued a 

“Supplemental Decision and Remedy Modification” on August 24, 2022. Based on the CPA’s

report, the Arbitrator found $13,914.87 in “Inappropriate credit card charges related to meals.” 

In the “Remedy Modification” of that decision, Arbitrator Armendariz ordered Mr. Vargas to 

repay APFA that amount, plus 50% of the Arbitrator’s Fee and the Auditor’s Invoices.

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15. Mr. Vargas has not repaid APFA the amounts awarded by Arbitrator Armendariz

for the breach of his fiduciary duty to APFA and its members. 

CLAIM FOR RELIEF

BREACH OF FIDUCIARY DUTY

29 U.S.C. § 501

16. The Labor-Management Reporting and Disclosure Act creates a federal fiduciary 

duty applicable to officers and other representatives of covered labor organizations, which 

includes the duty to hold the organization’s “money and property solely for the benefit of the 

organization and its members and to manage ... and expend the same in accordance with its 

constitution and bylaws and any resolutions of the governing bodies adopted thereunder.” 29 

U.S.C. § 501(a).

17. As National Treasurer of APFA, Mr. Vargas held a position of trust and had a 

fiduciary duty to the union and its membership as whole under 29 U.S.C. § 501(a).

18. As found by Arbitrator Armendariz, Mr. Vargas breached his fiduciary duty and 

failed to manage and expend APFA’s money in accordance with its Constitution and Policy 

Manual. That decision is binding upon Mr. Vargas. Mr. Vargas breached his duty by, among 

other things, willfully manipulating the formula used to pay others in his administration, 

resulting in an unauthorized overpayment to former APFA National President Bob Ross which 

has yet to be recovered by APFA, and incurring over $13,000 in inappropriate credit card charges 

related to meals. In so doing, Mr. Vargas violated the fiduciary duty provisions of 29 U.S.C. § 

501(a).

19. Mr. Vargas’s breach of duty also caused APFA to suffer additional costs in the 

form of the fees of the Article VII Arbitration and the expenses of the audit ordered by Arbitrator 

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Armendariz. Mr. Vargas was ordered to pay 50% of the Arbitrator’s Fee and the Auditor’s 

Invoices, which he has failed to do.

WHEREFORE, Counterclaim Plaintiff APFA prays that this Court provide the following 

relief:

1. Enter Judgment in favor of APFA declaring that Mr. Vargas has violated his 

fiduciary duty in violation of 29 U.S.C. § 501;

2. Grant APFA injunctive relief requiring Mr. Vargas to comply with the Arbitrator’s 

Decision and Order and Supplemental Decision and Remedy Modification in all respects;

3. Enter Judgment in favor of APFA and against Mr. Vargas in the full amount 

ordered by Arbitrator Armendariz in the Supplemental Decision and Remedy Modification, 

which is $30,963.03 plus interest.

4. Award APFA its reasonable attorneys’ fees and costs incurred in this proceeding; 

and

5. Grant such other and further relief to which APFA may be entitled.

Respectfully Submitted,

 /s/ James D. Sanford

JAMES D. SANFORD

Tex. Bar No. 24051289

JOSEPH H. GILLESPIE

Tex. Bar No. 24036636

Gillespie Sanford LLP

4803 Gaston Ave.

Dallas, TX 75246

Tel.: (214) 800-5111; Fax.: (214) 838-0001

Email: jim@gillespiesanford.com

Email: joe@gillespiesanford.com

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JEFFREY A. BARTOS (pro hac vice)

D.C. Bar No. 435832

Guerrieri, Bartos & Roma, PC

1900 M Street, N.W. Suite 700

Washington, DC 20036

Tel.: (202) 624-7400; Fax: (202) 624-7420

Email: jbartos@geclaw.com

Counsel for Defendant and Counterclaim Plaintiff 

Association of Professional Flight Attendants, and 

Defendants Julie Hedrick and Erik Harris

CHARLETTE L. MATTS (pro hac vice)

Tex. Bar No. 24133870

Association of Professional Flight Attendants

1004 W. Euless Blvd.

Euless, TX 76040

Tel.: (682) 301-8454

Email: Cmatts@apfa.org

Counsel for Defendant and Counterclaim Plaintiff 

Association of Professional Flight Attendants

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CERTIFICATE OF SERVICE

I certify that on Wednesday, August 30, 2023, I electronically submitted this document to 

the clerk of the court for the U.S. District for the Northern District of Texas using the court’s 

electronic case filing system. The electronic case filing system sent a “Notice of Electronic 

Filing” to the following individuals, who have consented to accept this Notices as service of this 

document by electronic means: 

KERRI PHILLIPS

K.D. Phillips Law Firm, PLLC 

6010 W. Spring Creek Parkway 

Plano, TX 75024

Phone: (972) 327-5800

Fax: (940) 400-0089

Email: kerri@KDphillipslaw.com

notice@KDphillipslaw.com

 /s/ James D. Sanford

JAMES D. SANFORD

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