## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it

N o. 11

- 1921 C OM MITT EE OF C ONC ERNED M IDWES T F LI GHT A TT ENDANTS FO R F AI RAN D E QUITABL E S EN IORITY I NT E GRA T I ON, e tal ., P laint if fs -App el lants , v. I NTERNATI ONA L B R OT H E R H OO D O F T EAM STERS A IRLI NE D I VI S I ON a nd T EAM STERS L OC AL 135, D efend a nts-A pp ellees

.

A pp eal from the United S t ates Di strictC ourt fo r the E astern Di stricto f Wisc onsin
. No . 10- C-379

—Rudo lphT. Rand a, Ju dge
.
A RG UE D S EP TE MBE R 30, 2011

— D ECI DE D N OVE MBE R 30, 2011

Befo re E A S T E RB R OO K, Chi e f Judg e, a nd P OSNERa nd W I L L I A MS, C ircu it Judges . E A S T E RB R OO K, C hi e

f Judg e . T he McC a s k i l l

–Bo nd Amen dm ent t o the F edera lA vi ati on Act, 49 U
. S. C. §421 12 note ,2 N o. 11

- 1921 provi des thata tr ansact ion “forthe com bi nati on o f m ult i ple ai r car ri er s into a s i ngl e a i r car ri er ” r equi re s the c om bi ned bus i ness to m er ge the s eni or i ty l i sts o f th e two c ar r i er s’ e m pl o y ee s. Re publ i c Air way s H o l di ng ac qui r ed M i dwes t Airli ne s i n J ul y 2 00 9 bypur ch as i ng i ts parent, M i dw estA ir G ro u p. The se ni or i ty l i sts f or m ech an ics, baggag e h an d lers, and ad m inistrative perso nne lha ve b ee n int eg r at ed unde rthe Am endm en t. But Re publ i c fur l o ughe d the fl i g hta tt en dan ts , r equi r i ng th e m t o a p p l y f o r“ n e w” j o b s ; i fth e y a r e r e h i r e d , t he Te amst er s Uni o n, whi chr epr es en ts the fli g hta tt en dants atRepubli c’ s o l der c ar ri er s ( Repu b li c Air l i nes, Ch autauq u a Air l i nes, and Shuttl e Am er i ca) , pl aces them at th e bot tom of its seniori ty roster. (Pil ots, too, w ere fur l o ughe d, b utthe ir sta tu s i s no t ati ss ue he r e. ) The T ea m st er s U n ion h as refu se d to bu d g e fr om th is p os iti on, wh i ch i t has m ai ntai ned even afterthe N ati onal M edi ati on Boar d concl ud ed that th e fl i ght a tte nd ants w ho w orked f or M idw est bec am e pa rt of a single bargaini ng uni t a t a n i ntegr ate d ai r tr anspor tati on business that c om pri sed Republi c, Chautauqu a, S huttl e Am er i ca, an d M id w es t. In reChaut auq ua Air l i ne s / S hu tt l eAm e r i ca / Rep ub l i c Air l i ne s /M i dwe s tAi r l i ne s /Front i e rAi r l i ne s /Ly nx Av i at i on , 37 N
. M
. B

. 148 (2010). T hree of M idw est’s fl i g ht a t t e nd a nt s , a nd a c o mm i t t e e pu r po r t i ng t o speak f oral lo fthem , fi l ed thi s s uit
. W hen Republi c Air w ays H ol ding acqui re d it, M i dw est w as l osing m oneyand needed to sur re nd erm osto fi ts pl an e s , wh i c hh a d b e e nl e a s e d

. Mi d we s th a d o n l y n i ne pla nes o n the date o fthe m er ger . W i thi n a few m onths, Re publi c r etur ne d the m t o Bo einga nd aba ndo ne d theN o. 11

- 1921 3

cer ti fi cate fro m federa lr egul ato rs thatent itl ed M i dw est to en ga ge in th e air tr an sp or ta tio n b u sin es s. R e p u b lic r et aine d a nd u se d M i dwes t’ s g at es , t ak eo ffa nd l an di ng slo ts , tra d em ar ks , cod e (Y X ), a n d oth er as se ts . Re p u b lic ( oper ating with M i dw est ’ s nam e a nd m ar ks) prov ided ser vi ce t o m osto fthe c ity pai rs thatM i dw esthad fl ow n; o nl y the ty pe ofai rcr aft chang ed. ( M i dw est used Boei ng 717 pla nes; Repu bl i c uses E m b ra er 19 0 s .) F ro n tie r A irlin es , an ot h er su b sid iar y of R ep u b lic A i rways Hol ding, has tak en o verthe ro utes that Re pu b l i c Ai r l i ne s o per a t e d in M i dwe s t ’ s n a me fr o m m i d2009 thr ough m i d-20 11, and M i dw est ’ s tra dem ar ks have been re ti re d; no o ne co ntends that t h ese devel opm ents affect how se ni or i ty i ssues sho uld have bee n handled e a r l i e r . ( E v e n tu a l l y we ma y n e e d t o c o n s i d e rqu e st i o ns about w hat rights M i dw est ’ s for m erem plo yee s hav e i n Fr onti er ’ s s eni or i ty sys tem , wh i ch is separat e fro m Repu bl i c’ s. S ee Teamst e rs U ni on, A irl i neD i vi s i on v. Front i e rAi r l i ne s , Inc . , 708 F. Sup p . 2 d 7 50 (E.D

. W is. 2010); In re C ha uta uqu a A irlines , 37 N .M .B . at 1 67 .) The dis tr i ct c ou rt h el d that Republ i c’ s abandonm ent o f M i dwes t’ s ce r ti fi ca te , a nd the r eturn o fi ts pl an es , mean t th atR ep u b lic h ad ac q u ire d so m e a ss et s re lat ed to air tr anspor tat i on but not an “a ir car ri er ” forthe pu rpos e of the M cC askill– B ond A m en d m en t. A lthou gh the cou rt initi all y d en ied th e Te am sters’ m otion for su m m ary j ud gm ent, 74 2 F
. S up p. 2d 10 35 ( E.D. W i s. 2010) , i t g ra nted a m otion for recon side ration an d ruled i n th e U nion ’s fav or . 201 1 U .S. D ist . L EX IS2 7 1 8 ( E
. D

. W is. J an . 10, 2011 ). The c ou r t st at ed th at“ M cCa sk i l l–Bo nd was ne ve rmean t to p ro te c t t h e e m p loy ee s o f an air c ar rie r th atsim p ly goe s o ut o fbusi ness. ” Id

. at* 9.4 N o. 11

- 1921 Legi sl atur es do not m ean thi ngs in the abst ra ct; as J usti ce Hol m es once pu t i t, the ri ght ques ti on is what they m eant by w hat they s ai d. “[ A st atute ] does not d i s c l o s e o n e me a n i n gc o n c l u s i v el y a c c o r d i n gt o th e l a ws ofl anguage . There up on we ask, n ot w h at thi s m an m eant, b u t w hat those words would m ean in the m outh o fa n o r ma ls p e a k e r o fE n g l i s h, u s i n gth e m inth e c i r c u msta nces i n w h ich t hey were used .

. . . But the nor m al sp eaker of En gli sh i s m erely a spec ialva riety, a l iterary f o r m, s o t o s p e a k, o fou ro l d fr i e n d th e p r u d e n tma n . He i s e xter nalto the parti cul arwri ter, a n d a r efer ence to hi m a s a cr i te r i o n i s si m pl y a no th eri ns tan ce o fthe ex te r na l i tyo fth e law.

. . . W e do no t i nqui r e whatthe l e g i sla tu re m ea n t; w e a sk on ly w h atth e s ta tu te m ea n s.” O live r W en d ell H olm es , Jr., The Theo ry of Lega l Int e rpre t at i on , 12 H ar v. L . Re v. 41 7, 41 7– 19 (18 99 ), r e p r i n te d in hi s C o l l e c t ed L ega l P a pers 20 4, 20 7 ( 1920 )

. W hat the M cCaski l l–Bond A m endm ent m eans i s no t har d to di sc ern. H er e i s a l lo fthe sta tutory t ext that m att er s: ( a) W i thr es p ec t to a ny c o ve r ed tr an sa ct i o n involv ing tw o orm or e co ver ed ai r car ri er s that re sul ts i n the com bi nati on o fcr afts orcl ass es that ar e subj ect to the Rai l w ay LaborA ct (4 5 U.S

. C. 151 et seq .), sec ti ons 3 a nd 13 o fthe l aborpro tecti ve provi si ons i m posed by the Ci vi lA er onau ti cs Board in the A l l eg h en y- M ohawk m er ger( as pu bl i shed at 5 9 C.A.B. 45 ) shal lapplyto the i ntegr atio nof co ve re d em p lo y ee s o f th e c ov er ed air car ri er s; [two excepti ons ar e o m i tte d as i rr el evant ] ( b) I n thi s s ecti on, the f ol l owing defini ti ons apply:N o. 11

- 1921 5 ( 1) Th e t er m “a i r car ri er ” m eans an ai r car ri er that hol ds a ce rt i fi cate i ssued under chapte r 411 ofti tl e 4 9, U ni ted S tat es Code. (2) T h e te rm “ c ov er ed a ir c ar rie r” m ea n s an air car ri erthati s invol ved i n a c ove re d tra nsactio n . . . . ( 4) The t er m “ co ve r ed tr an sa ct i o n” mean s

— ( A ) a tr ansact i on forthe com bi n at ion o f m ultiple air carriers int o a si ng le ai r carri er ; and w hi ch ( B) i n volv es the t ra nsfero fo w ners hi p or contr olo f

— ( i ) 50 p ercent orm or e o fthe equi ty secur i ti es ( as defined in sect i on 1 01 of tit le 1 1 , U n ite d Sta te s C od e) o f an air car ri er ; o r ( i i ) 5 0 per ce nto rm o r e ( byvalue ) o fthe asset s of th e air carrier. S ubs ec ti o n ( a) pr o vide s th e ba si c r ul e: mer g i ngthe s en i or i ty l i sts , r athe r th an putti ng em plo yee s o fthe acqu ired carrier at th e bottom of th e acq uirin g c arrier’ s l i st, was a c on dit i on o fthe A l l egheny–M ohawk m er ger and ther ef or e i s r equi re d in ev er y c ove re d tra nsacti on “in v o l v i n g ” c o v e r e d a i r c a r r i e r s . An “ a i r c a r r i e r ” i s a ny fi rm thathol ds a cert i fi cate i ssued under 49 U
. S. C. §411

. M i dw esthel d such a ce rt i fi cate o n th e d ate the m er ger cl os ed and ther ef or e was an “ ai r car ri er . ” I t a l so w as “i nvol ved i n ” a t ra nsacti on. True, M i dw estA i rl i nes was6 N o. 11

- 1921

a s u b sid iar y in a h old in g c om p an y s tr u c tu re . Re p u b lic A i rl i nes’ pare nt co m pany acqui re d M i dw est ’ s par ent. Yet su bs i di ar i es a r e “inv o l ve d i n” s ucha t r an sa ct i o n; the M cCaski l l–Bond A m endm ent doe s no t r equ ire that th e o per at i ngc o m pany b e ac qui r ed, o nl y tha t i t be “ i nvol ved. ” ( Otherwise the sta tute coul d b e evad ed w i th eas e, bec ause i t i s e asyto cr eat e a pare nt f orany cor pora tio n .) Thus the que st i o n b ec o m es whethe rM idw es t an d Re publ i c en g ag ed i n a “ co ve r ed tr an sa ct i o n. ” The c o nditions ofsubpara gr aph ( B) a re sa ti sfi ed beca use R ep ub li c acq uir e d 1 00% of M idw est. ( I t is th erefore unne ce ss ary t o c o ns i derwhethe r th e g at es a nd l an di ng sl ots w ere worth m or e than M i dw est ’ s m eag erequi ty i n the l eas ed pla nes. ) A nd subparag ra ph ( A ) is sa ti sfi ed i f M i dwe s t b e c a me pa r t o f a “ s i ng l e a i r c a r r i e r” with R ep ub lic. T ha t it d id. Op erations an d sch ed ules w ere i ntegr ate d; Repu b li c answere d the phones, to ok re ser vati on s, and beg an to fl y M i dw est ’ s r outes with pl anes an d em p loyees tha t cam e from i ts oth er sub s id ia ry carr i er s. Tha t’ s why the Nat i o na lM edi at i o n Bo ar d c o nc lu d ed th atall fligh t a tt en d a n ts are p ar t o f a sin gle po o l, r epr es en te d b y a s i ng l e uni o n; tha t’ s why the s en i or i ty l i sts o fthe re servat i ons cl er ks and m echani cs al re ady have been i ntegr ate d. W hen Repu bl ic abandoned M i dw est ’ s cert i fi cate and re turned the l eas ed pla nes, th is m ea n t e ve nm or e c om p let e c on so lid at ion . On ly R ep u b lic re m ain ed , as a “s in gle air c ar rie r.” N othing in the t ext o fthe sta tute ask s whether one of the m er gi ng ca rr i er s i s ba nkrupt and about to vani sh wh enN o. 11

- 1921 7 th e tr an sa ct i o n c l o se s. T he re ’ s a g o o d r ea so n fo rthe om i ssi on: thi s s tatute g re w o ut o fA m er i can Air lines’ a c qu i s i t i o n o fT r a ns Wo r l d Ai r l i ne s , wh i c h wa s b a nk r up t and w oul d have cl ose d i ts door s had i t no t be en acq u i r e d

. T WA h a d i t s ma i nh u b i nS t
. L o u i s ; the t wo Se nator s whose nam es ar e on the l egi sl ati on r epresen ted the Stat e of M issouri. ( T he ori ginal spon sors w er e S enato rs Bond and T al ent; S en. M cCaski l lr epl aced Se n. Tal ent a s a sponso r w hen she succee ded hi m . ) W hat seni or i ty TW A ’s for m erem plo yee s would r eta i n w as a con t e nt i o us i s s ue tha tthr e a t e ne d t o fr us t r a t e the t r a ns acti on o r preci pit ate a str i ke; the sta tute p ro vi des how th es e tr an sa ct i o ns mustb e ha ndl ed in the futur e. One can n o t rem ove ban krup t and soon-to-d isap p ear carriers fro m the sta tute’ s co ver age , as the Team ste rs prop os e, w ithou t sim ult a ne ou sly ci rcu m ven ting th e statu tory text and frustr ating the de sign behi nd i t. “[ W ] hat those w or ds w oul d m ean in the m ou th of a no rm alspeak er ofEn gl i sh, usi ng the m i n the ci rcum sta nces i n w hi ch th eywer e us ed” i s th atthe y govern a l lt r an sa ct i o ns i n w hi ch an a cquis i ti on i s fol l owed byj oint o perat i ons, w hethero r not one car ri erwas on the br i nk o fco l l apse. Repu bl i c ac quir ed M i dw est

— w hat l i ttl e o fi t r em ai ned

— l o ck, s t o c k, a n d b a r r e l, v i a a me r g e r, wh i c ht ur ns tw o c or p or at ion s in to on e , w h ile th e s ta tu te w ou ld have been sa tis fi ed w i th the acqui si ti on o fo nl y 5 0% o f M i dw est ’ s a sse ts. The sta tutory r equi re m ent that the ( f or m er l y) sep arate ca r r i er s o per at e as a s i ng l e ca r r i ermatt er s when th e car ri er s m ai ntai n separ ate businesses. A l though Un i ted A irl ines an d Con tinen tal A irl ines h ave m erged ( rath er,8 N o. 11

- 1921 th ei rho l di ngc o m pan i es ha ve mer g ed) , the y ha ve c o ntinue d t o o per at e as s epa r at e bus i ne ss es , i nt egrat i ng th ei ro per at ions onl y s l o wl y . Unti lthe j o i nto per at i o ns h av e re ac h ed th e p oin t th atth ey h a v e be c om e a “s in gle ai r car ri er,” th ey need not m er ge thei r seni or i ty l i sts
. M i dw est, byco ntra st, i ntegr ate d opera ti ons w i th Rep u b l i c, Chautauqu a, and Shuttl e Am er i ca e xped i tiously; that ’s w hy i t w as a b le to gi ve u p i ts certifi ca te a nd pl an es , whi l e tr an sferrin gg at es a nd l an di ng sl ots f oruse by th e othe r j ointl y o perat ed car ri er s. M i dw estand Republi c eng age d i n a “ cove re d tra nsacti on. ” The l ate r w ast i ng aw ay of M i dw es t il l ustr ate s the c om ple tenes s o fthe i ntegr ati on; it d oe s no t neg ate the s tatute’ s co ver age . The j ud gm ent i s r eve rs ed, and the c as e is r em anded f o rpr o ce eding s co ns i st en t wi ththi s o pi ni o n.

11- 30- 11