1 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT 

OF TEXAS FORT WORTH DIVISION

EUGENIO VARGAS, §

Plaintiff/Counterclaim Defendant, §

§

v.

§

§ 

§ 

§ 

§

Civil Action No. 4:22-CV-00430-Y

§

ASSOCIATION OF PROFESSIONAL §

FLIGHT ATTENDANTS, et al. §

Defendants/Counterclaim Plaintiff. §

RESPONSE IN OPPOSITION TO DEFENDANTS’ MOTIONS 

TO FILE AMENDED ANSWER AND COUNTERCLAIMS AND BRIEF IN SUPPORT

Plaintiff/Counterclaim Defendant, Eugenio Vargas (“Vargas”) respectfully submits this 

response and brief in opposition to Defendants’ Motion for Leave to file an Amended Answer and 

Amended Counterclaims and Brief in Support. Plaintiff filed his complaint on May 17, 2022 for 

violations of his rights as a union member under 29 U.S.C. § 411, and 529 et seq. (“LMRDA”), as 

well as other claims, against the Association of Professional Flight Attendants (“APFA” or the 

“union”), Julie Hedrick (“Hedrick”), the APFA National President, and Erik Harris (“Harris”), the 

APFA National Treasurer (hereafter referred to collectively as “Defendants”). (Doc.1). Defendants 

filed their Answer and Counterclaims on June 13, 2022. (Doc.11). The court granted leave to file 

Plaintiff’s First Amended Complaint September 15, 2022. (Doc. 40) Defendants filed their 

amended Answer and Counterclaims on March 8, 2023. (Doc. 79; 76). On August 30, 2023, 

Defendant filed a Motion for Leave to Amend their Answer and Counterclaims, (Doc. 108). 

Plaintiff now files his Response in Opposition of Defendants’ Motion for Leave to Amend their 

Answer and Counterclaims. 

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Facts

Plaintiff, Eugenio Vargas (“Plaintiff”) seeks damages alleging unlawful violations of the 

Labor Management Reporting and Disclosure Act, 29 U.S.C. § 411, and 529 et seq. (“LMRDA”), 

as well as other claims, against the Defendants. APFA is a labor organization covered under the 

LMRDA, 29 U.S.C. §401 etseq, and 29 U.S.C. § 158, et seq. Plaintiff is a member in good standing 

of APFA as defined under the LMRDA and 29 U.S.C. § 158. On or about January of 2016, 

Plaintiff ran for office within the APFA national union elections. For clarification, Robert “Bob” 

Ross was elected National President, Nena Martin elected National Vice-President, Eugenio 

Vargas (“Vargas” or “Plaintiff”) elected National Treasurer, and Marcy Dunaway elected National 

Secretary (“Ross Administration”).

1

 The Ross Administration held office from April 1, 2016 to 

July 1, 2018, with the notable exception of Robert “Bob” Ross who resigned on March 1, 2018 at 

the behest of the APFA Board of Directors.

Ross negotiated an exit agreement similar to APFA’s previous National President, Laura 

Gladings, in exchange for his resignation from office. In March of 2018, Ross and the APFA Board 

of Directors signed his exit agreement and he resigned (“Ross Transition Agreement”). Vargas 

subsequently was shown only a portion of the Ross Transition Agreement, and after consulting 

with counsel and the APFA accountants, he calculated and authorized the payments to Ross. In 

2020, Vargas was charged with violations of the APFA Constitution for those payments calculated 

and approved under the Ross Transition Agreement. Additional charges were also pursued for

credit card expenses previously approved by APFA, the lack of a furniture log on behalf of the 

union, and vehicle rental charges. A disciplinary hearing was held, and ultimately the union

disciplined Plaintiff. Furthermore, Plaintiff was banned from ever holding office for the union in 

1 Marcy Dunaway is no longer a member of APFA, as she has retired from American Airlines, Inc. as a flight attendant, and is 

now employed as a Senior Analyst of American Airlines, Inc.

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his lifetime—a disciplinary measure not specifically authorized by the APFA Constitution and 

never before seen at APFA. 

Plaintiff argues this is a deliberate attempt to suppress his speech and affiliation with a 

political party within the union. The current APFA Administration—who belong to the opposing 

political faction—misrepresented to the APFA leadership and to the Plaintiff that APFA’s

accounting firm conducted an “accounting review” where it was determined that Ross owed the 

union money for alleged overpayments made under the Ross Transition Agreement. The union 

and the members of the Hedrick Administration argued that Vargas and Ross conspired to inflate 

the payments Ross received under the Ross Transition Agreement. This “accounting review,”

rather than an audit, resulted in only graphs that were shown to the APFA Board of Directors and 

APFA Executive Committee. After Plaintiff’s Disciplinary hearing, he discovered that the union 

withheld a confidential memorandum from the accounting firm written to the APFA Board of 

Directors that stated that Ross was, in fact, paid properly. The Confidential Memo directly 

contradicts Defendants’ assertions to the APFA leadership. However, this document was 

concealed from APFA leadership, the Arbitrator conducting the union disciplinary hearings, and 

the Plaintiff. 

Plaintiff was not provided the safeguards against improper disciplinary action guaranteed 

under the LMRDA. Defendants breached their fiduciary duty among other violations. The result 

of Defendants’ conduct is that Plaintiff was fined, suffered reputational damage, privacy 

violations, removed from his position on the APFA Board of Directors, and banned from holding 

any official APFA position for the remainder of his life. Plaintiff seeks damages. 

Defendant’s original counterclaims included a breach of fiduciary duty under the LMRDA 

§ 501, breach of fiduciary duty under Texas Common Law, and a claim for enforcement of the 

Arbitration Award. This Court dismissed the breach of fiduciary duty claim under Texas Common 

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Law as beyond the statute of limitations. (Doc. 70). On August 29, 2023, Plaintiff filed a Second 

Motion to Dismiss against Defendant’s breach of fiduciary duty claim under LMRDA § 501, and 

Enforcement of the Arbitration Award under 29 U.S.C. § 185(a) claim. (Doc. 107). Defendant, 

APFA, now seeks leave to amend its counterclaim to eliminate their claim to enforce the 

Arbitration Award, leaving only Defendant’s last claim—breach of fiduciary duty claim under 

LMRDA § 501.( Doc. 108). Plaintiff opposes Defendant’s Motion to Amend based on futility. 

Arguments

Subsequent amendments and supplementation to a party’s claims before the court require 

that the amending party first seek leave of court or obtain the opposing party’s written consent 

before filing another amended complaint, understanding that leave to amend “shall be freely given 

when justice so requires.” Manuel v. Gembala, 7:10-CV-4-FL, slip op. at 3 (E.D.N.C. July 27, 

2011); see Rule 15, Fed. R. Civ. P. "The court should freely give leave [to amend] when justice so 

requires.” Fed. R. Civ. P. 15(a)(2). Nevertheless, this generous standard is 'tempered by the 

necessary power of a district court to manage a case.'” Bell v. Dall. Cnty., No. 11-11181 (5th 

Cir. 2012) (citing Schiller v. Alpert Grp., 342 F.3d 563, 566 (5th Cir. 2003)). “Similarly, ‘[a] 

district court may deny a proposed amendment for futility-meaning the amended complaint would 

fail to state a claim upon which relief could be granted.’” Villarreal v. Wells Fargo Bank, N.A., 

814 F.3d 763, 766 (5th Cir. 2016) (citing Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 872-

73 (5th Cir. 2000)). See also, Petty v. Great W. Cas. Co. (5th Cir. 2019). 

Leave to amend or supplement should be granted only in the absence of “undue delay, 

bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by 

amendments previously allowed undue prejudice to the opposing party by virtue of allowance of 

the amendment, or futility of the amendment.” Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 

9 L. Ed. 2d 222 (1962); see Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999).

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1. Business decisions are not a Breach of Fiduciary Duty under LMRDA 501(a)

Defendant continues to allege charges and expenses that breach the APFA Constitution 

and Policy form the basis of its claim for breach of fiduciary duty under §501(a). (See Doc. 108-1 

PAGEID 3717). This is not a breach of fiduciary duty. The foundation for a breach of fiduciary 

duty under 29 U.S.C. § 501(a) cannot include those decisions that are business-related per standing 

law. The 5th Circuit Court held that 

“disagreements over the wisdom or appropriateness of particular administrative . 

. . decisions are usually not amenable to suit under the LMRDA [referencing suits 

under § 501(a)]. Indeed, most of these matters are the sort of ‘internal union 

grievances’ properly left to be worked out via union democratic processes (as they 

eventually were here) and not by a federal court sitting as a sort of ‘super-review 

board.’” (Hoffman v. Kramer, 362 F. 3d 308, 322 (5th Cir. 2004) (citing United 

Food & Commercial Workers Union, Local 1099 v. Southwest Ohio Reg'l Transit 

Auth., 163 F.3d 341,475 (6th Cir.1998)). 

Defendant claims that Plaintiff breached his fiduciary duty because the APFA National President 

submitted charges incurred while conducting business on behalf of the union, and Plaintiff, as 

APFA’s National Treasurer, approved those charges. Now, two years after approval, APFA claims

those charges fell outside the scope of recoverable expenses under APFA Policy—thisfails to state 

any claim for recovery. basis of this claim centers on an allegedly inaccurate business decisions 

by Plaintiff made while in the execution of his duties as APFA National Officer. 

In other words, if Ross, as National President, charged a meal while working on behalf of 

the union and believes this falls within the scope of the governing rules, he would submits his 

receipt for approval—per the APFA procedures. Vargas, as National Treasurer, would review that 

same charge in conjunction with APFA accountants, and if it was subsequently approved—per the 

APFA procedures in place at the time based on the same assessment—then the basis for a breach 

is a decision in the execution of the National Officer’s duties. Without some intentionally 

subversive behavior by the Plaintiff to benefit himself, so far Defendant’s only complaint is that 

Plaintiff allegedly made the wrong decision in the execution of his duties. 

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Defendant fails to assert facts that rise to the level of a breach, rather Defendant only 

complains that Plaintiff’s business decisions in the execution of his duties were wrong. Plaintiff 

complied with APFA procedures in place at the time. (See Vargas Aff.; Doc. 86-1). Ross submitted 

receipts for charges and expenses to the Treasurer, Vargas, who reviewed in conjunction with 

APFA accountants and either approved of charges as valid, or inquired for additional information 

about a charge prior to approval. (See Vargas Aff.; Doc. 86-1). If a charge was questioned and 

Vargas continued to object to a particular charge as a valid expense, the Treasurer presented it to 

a Board of Director member who then either approved or denied the charge as valid. (See Vargas 

Aff.; Doc. 86-1). 

Plaintiff did not subvert these procedures to ensure his charges were approved. Plaintiff 

did not interfere with the normal processes and safeguards in place at the time to financially 

benefit. Furthermore, the procedures at the time required subsequent review by APFA’s in-house 

accounting department therefore, to rise to the level of a breach, Plaintiff would have to by-pass 

procedures and submission of the charges altogether as each expense and payment was reviewed 

by multiple people. All of the expenses incurred and payments made were reviewed and approved 

according to the procedures in place while Plaintiff was in office. It was only after a competing 

political party took office—over two years after the charges were originally made—that the union 

decided to evaluate these business decisions. 

2. No Federal Jurisdiction exists over APFA’s Constitution and Policy.

Defendant’s redrafted and filed its Amended Answer and Counterclaims on March 8, 2023. 

(Doc. 76). Defendant submitted its proposed First Amended Answer and Counterclaims for this 

Court’s consideration as a second attempt to cure the defects in Defendant’s claims against 

Plaintiff. (Doc. 108). The obvious problem with Defendants’ second attempt to amend its 

counterclaims is that APFA continues to argue the Plaintiff breached his fiduciary duty claim under 

Case 4:22-cv-00430-Y Document 114 Filed 09/13/23 Page 6 of 10 PageID 3819
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29 U.S.C. § 501(a) because Plaintiff violated the APFA Constitution and Policy. 

The glaring hole in Defendant’s amended counterclaim is that there is no federal 

jurisdiction over APFA’s Constitution and Policy. The 5th Circuit court already ruled on this issue

under the exact same fact pattern with the exact same union Constitution and Policy at issue in this

case. In Adams-Lundy v. APFA II, the 5th Circuit held that “a federal court has no jurisdiction to 

enforce union constitutions and by-laws. . . .” Adams-Lundy v. A.P.F.A, 792 F.2d 1368, 1373 (5th 

Cir. 1986); See also, McGovern v. New Orleans Clerks Checkers, Local 1497 ILA,343 F. Supp. 

351, 352 (E.D.La.), aff'd per curiam, 463 F.2d 423 (5th Cir. 1972). 

This Court recently followed this same Adams-Lundy II ruling when TWU brought the 

same argument that violation of the union constitution was a violation of 29 U.S.C. §501(a) breach 

of fiduciary duty. This Court held that: 

“’[a] union's violation of its own constitution is not per se a violation of the 

LMRDA.’ Rights guaranteed solely by a local union's constitution are contractual 

rights—not LMRDA rights—and ‘a federal court has no jurisdiction to enforce 

union constitutions and by-laws as such.’” (Martin v. Local 556, Transp. Workers 

Union of Am., CV No. 3:14-CV-0500-D (N.D. Tex. Sept. 3, 2014) (citing AdamsLundy II, 792 F.2d at 1373; and McGovern v. New Orleans Clerks & Checkers, 

Local 1497 ILA, 343 F. Supp. 351, 352 (E.D. La. 1972), aff'd per curiam, 463 

F.2d 423 (5th Cir. 1972)). 

Defendant’s breach of fiduciary duty claim under §501(a) is based solely on the APFA

Constitution and by-laws in its First Amended Answer and Amended Counterclaims. (Doc. 76). 

Ergo, the proposed Amended Counterclaims fails to resolve its jurisdictional defect in addition to 

its failure to state a valid claim for recovery. Defendant’s Amended Counterclaim is nothing more 

than a vain attempt to halt Plaintiff’s ability to run for office. However, even more concerning is

Defendant’s attempt to use the federal courts to enforce its fraudulent Arbitration Award, which

bans Plaintiff from holding public office within the union. (See Arb Award Doc. 11-1; PG 1). The 

5th Circuit denied any jurisdictional basis to enforce APFA’s Amended Counterclaim, APFA’s 

Arbitration Award, and APFA’s Constitution and APFA’s Policy. Regardless of how APFA 

Case 4:22-cv-00430-Y Document 114 Filed 09/13/23 Page 7 of 10 PageID 3820
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reshapes its arguments, the union cannot enforce its Constitution in federal court.

2

 

3. Public record shows Defendant suffered no loss or damages. 

Defendant’s damages cited in its Proposed Amended Counterclaims are the same as those 

cited in Plaintiff’s damages ordered in APFA’s Arbitration Award. (Doc. 76); (See Arb Award 

Doc. 11-1; PG 1). This shows that the damages incurred are not directly related to the 

overpayments made, but incurred as a result of APFA’s disciplinary procedures. 

The independent accounting firm of Woods, Stephens, and O’Neil, L.L.P. conducts annual 

audits of all expenditures made with APFA funds. The final audit report is submitted to the four 

National Officers and the APFA Board of Directors for a final review and approval. This annual 

audit report is used by APFA accounting staff and National Officers to draft the LM-2 Report. The 

United States Department of Labor requires unions report on the LM-2 Financial Report any loss 

of union assets or funds each year, even if reimbursed. The LM-2 Financial Report required by

29 U.S.C. § 431 are signed under penalty of perjury by the National Officers of APFA, including 

any false statements are punishable by one year imprisonment and $10,000 fines. (29 U.S.C. § 

439). Any loss of any assets for any reason on behalf of the union, whether reimbursed or not, 

2 The Court should note the previous statements made by Defendants’ Counsel on record (Vargas Dkt. No. 81) 

(“Plaintiff’s settlement proposals were simply not feasible as they. . . would require the Union Defendants to take 

actions which. . . would violate the APFA Constitution. . . .”). Defendant’s counsel argues it cannot, and will not, 

settle the claims pending before this Court while its claims persist. Plaintiff failed to receive not even a counteroffer 

in response to his offers for settlement. APFA contends that it must pursue the Ross Administration. Defendants 

argue settlement of any kind would violate federal law breach of fiduciary duty and the governing union’s rules—

even if settlement is in the union membership’s best interest—they cannot and will not settle their claims. 

Consequently, this Court should consider the Ross Administration’s position. Plaintiff has no other option, but to 

exercise his rights to recover for Defendants’ misconduct—as well as the rest of the Ross Administration—for the 

sake of their families, their reputations, and their careers. The Court should also note that APFA continues to pursue 

Nena Martin and Marcie Dunaway by ordering additional audits of their expenses. This was announced within the 

last two month, despite these pending claims before this Court. Nena Martin previously won in Arbitration on 

these exact claims last fall. To date, APFA has not audited any other administration except for the Ross 

Administration. Most notably, December is when new candidates, like Nena Martin, will announce their intent to 

run for National Office next year. 

Case 4:22-cv-00430-Y Document 114 Filed 09/13/23 Page 8 of 10 PageID 3821
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must be reported to the U.S. Department of Labor.3 Therefore, if the Ross Administration 

misappropriated funds, APFA must report this loss to the Department of Labor. (29 U.S.C. § 439). 

A simple review of APFA’s LM-2 question 13 shows no reported shortage or loss suffered by the 

union since 2018—when the Ross Administration filed the LM-2 reporting loss of furniture that 

was fully reimbursed. The union did not suffer damages by Plaintiff’s conduct—it is that simple. 

APFA National Treasurer signed the LM-2 stating that the union suffered no loss within 

the last four years. Furthermore, the only loss reported to the United States Department of Labor 

includes fraud on an officer’s credit card in 2016, and loss of furniture that was reimbursed in 

2018.4

 Consequently, all other LM-2s on public record indicate the union suffered no loss of its 

funds—let alone indicate discovery of any alleged breach of fiduciary duty. Since the LM-2 

Reports are filed under oath by the union and signed by the National Officers—the public record 

shows that the Defendant cannot claim damages as a result of Plaintiff’s conduct. If it had, this 

was required to be reported as a loss on its annual LM-2 filing. 

3 The LM-2 Filings require reporting whether or not an annual audit has been conducted under Question 12. Under Section 69,

on the last page of each LM-2 form, APFA cites that the accounting firm that conducted the audit was Woods, Stephens, and 

O’Neil. 

2023 - https://olmsapps.dol.gov/query/orgReport.do?rptId=869753&rptForm=LM2Form

2022 – https://olmsapps.dol.gov/query/orgReport.do?rptId=840723&rptForm=LM2Form

2021 - https://olmsapps.dol.gov/query/orgReport.do?rptId=773865&rptForm=LM2Form

2020 - https://olmsapps.dol.gov/query/orgReport.do?rptId=731533&rptForm=LM2Form

2019 – https://olmsapps.dol.gov/query/orgReport.do?rptId=709508&rptForm=LM2Form

2018 – https://olmsapps.dol.gov/query/orgReport.do?rptId=679829&rptForm=LM2Form

2017 – https://olmsapps.dol.gov/query/orgReport.do?rptId=650505&rptForm=LM2Form

2016 – https://olmsapps.dol.gov/query/orgReport.do?rptId=628943&rptForm=LM2Form

2015 – https://olmsapps.dol.gov/query/orgReport.do?rptId=594782&rptForm=LM2Form

4 The LM-2 Filings require reporting any misappropriation, shortage, or theft of funds discovered within that year to the U.S. 

Department of Labor. See Question 13 on Pg 1 of the following LM-2 Filings by APFA. The only years theft or shortages were 

reported were in 2016 and 2018—and in 2018 the Notes under Section 69 clearly indicate that the loss was for furniture which 

was fully reimbursed—therefore no damages were suffered if none were reported under the LM-2. Clearly APFA testified as to 

only a loss in 2018, and that that was fully reimbursed. The LM-2 are signed by the APFA National Officers under penalty of 

perjury. 

2022 - https://olmsapps.dol.gov/query/orgReport.do?rptId=840723&rptForm=LM2Form

2021 - https://olmsapps.dol.gov/query/orgReport.do?rptId=773865&rptForm=LM2Form

2020 - https://olmsapps.dol.gov/query/orgReport.do?rptId=731533&rptForm=LM2Form

2019 – https://olmsapps.dol.gov/query/orgReport.do?rptId=709508&rptForm=LM2Form

2018 – https://olmsapps.dol.gov/query/orgReport.do?rptId=679829&rptForm=LM2Form

2017 – https://olmsapps.dol.gov/query/orgReport.do?rptId=650505&rptForm=LM2Form

2016 – https://olmsapps.dol.gov/query/orgReport.do?rptId=628943&rptForm=LM2Form

2015 – https://olmsapps.dol.gov/query/orgReport.do?rptId=594782&rptForm=LM2Form

Case 4:22-cv-00430-Y Document 114 Filed 09/13/23 Page 9 of 10 PageID 3822
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CONCLUSION

In conclusion, Defendant failed to state a claim for recovery under LMRDA §501 because—as 

demonstrated above—the conduct Defendant complains of consists of business decisions which 

fail to rise to a breach of fiduciary duty, and Defendant testified in the U.S. Department of Labor 

LM-2 Financial Reports that the union suffered no loss or damage since 2015. Furthermore, the 

Court has no jurisdiction to enforce the Arbitration Award or a federal breach of fiduciary duty 

claim based solely on a Union Constitution, as determined by the 5th Circuit Court in the AdamsLundy case. For the reasons stated herein, Plaintiff requests that the Court deny Defendants 

Motion to Amend Answer and Amend Counterclaim for Relief. 

Date: September 13, 2023 Respectfully submitted,

By: /s/ Kerri Phillips s 

Kerri Phillips, Esq.

Texas Bar No. 24065906

Phone: (972) 327-5800 

Email: kerri@kdphillipslaw.com

KD PHILLIPS LAW FIRM, PLLC

6010 West Spring Creek Parkway

Plano, Texas 75024

Fax: (940) 400-0089 

For Service of Filings: 

notice@kdphillipslaw.com

ATTORNEY FOR PLAINTIFF

CERTIFICATE OF SERVICE

I certify that on this 13th day of September 13, 2023, a true and correct copy of 

the foregoing document was served on the below listed counsel of record for Plaintiff/

Counterclaim Defendant Vargas by a means permitted by Rule 5(b)(2) of the Federal Rules of 

Civil Procedure (“F.R.C.P.”). 

By: /s/ Kerri Phillips s 

Kerri Phillips, Esq.

Jeffrey Bartos

Charlette Matts

James Sanford

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