UNITED STATES DISTRICT COURT FOR THE 

DISTRICT OF NEW HAMPSHIRE

Air Line Pilots Association 

International

v. Civil No. 04-cv-331-JD

Opinion No. 2006 DNH 115

Guilford Transportation 

Industries, Inc. et al.

O R D E R

Following a remand from the First Circuit, the defendants,

Guilford Transportation Industries, Inc. (“Guilford”), Pan

American Airways Corp. (“Pan Am”), and Boston-Maine Airways Corp.

(“Boston-Maine”), move for summary judgment. The plaintiff,

Airline Pilots Association, International (“ALPA”), objects to

the motion, arguing that there are disputed issues of material

fact that necessitate a trial. The defendants also move to

strike certain materials supporting ALPA’s opposition to the

motion for summary judgment. Also before the court are motions

relating to the pending trial.

Standard of Review

Summary judgment may be granted when “the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56(c). The movant must establish that the record is devoid of

Case 1:04-cv-00331-JD Document 192 Filed 10/03/06 Page 1 of 13
1Previous orders of this court, and the opinion of the First

Circuit remanding this case, provide a more thorough discussion

of the procedural and factual history of this case. See Air Line

Pilots Assoc., Int’l v. Guilford Transp. Indus., Inc., 399 F.3d

89 (1st Cir. 2005) (“Air Line Pilots II”); Air Line Pilots

Assoc., Int’l v. Guilford Transp. Indus., Inc., 360 F. Supp. 2d

262 (D.N.H. 2004) (“Air Line Pilots I”).

2

any genuine issues of material fact. See Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986). “[T]he mere existence of some

alleged factual dispute between the parties will not defeat an

otherwise properly supported motion for summary judgment; the

requirement is that there be no genuine issue of material fact.” 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A

disputed fact is material only if it “might affect the outcome of

the suit under the governing law.” Id. at 248. In reviewing the

summary judgment record, the court must resolve all reasonable

inferences and all credibility issues in favor of the nonmoving

party. See id. at 255.

Background

Because the travel of this case has been stated before,1 the

court provides only a brief summary of the procedural history,

followed by a description of the First Circuit’s remand order. 

ALPA brought the present action under the Railway Labor Act

(“RLA”), 45 U.S.C. §§ 151-188, seeking an injunction to prevent

the defendants from effectively transferring Pan Am’s unionized

commercial airline business to the non-union Boston-Maine. See

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2Pan Am and Boston-Maine are both wholly-owned subsidiaries

of non-party Pan American Airlines, Inc. Although it does not

have any ownership interest in either Pan Am or Boston-Maine,

Guilford leased Boeing 727s to both companies. The only party to

the CBA with ALPA was the subsidiary Pan Am. 

3

Air Line Pilots II, 399 F.3d at 92-93 (describing the RLA’s

statutory scheme and the limits it imposes on judicial

involvement in labor disputes). ALPA alleged that Pan Am sought

to avoid the obligations of the collective bargaining agreement

(“CBA”) it had entered with ALPA by transferring its work to its

non-unionized affiliate.2 In September 2004, a magistrate judge

conducted an evidentiary hearing, issued a report and

recommendation, and granted ALPA’s motion for a temporary

restraining order. 

This court adopted the magistrate judge’s report and

recommendation finding that a “major” dispute existed under the

RLA. Air Line Pilots I, 360 F. Supp. 2d at 269-70. Accordingly,

this court granted a preliminary injunction ordering the

defendants to, inter alia, refrain from using Boston-Maine to

operate large jet aircraft. Id. at 288. 

While the defendants’ interlocutory appeal was pending with

the First Circuit, Pan Am’s operations were shut down

notwithstanding that the injunction prevented Boston-Maine from

picking up Pan Am’s business. The defendants asserted that the

closure was necessitated by Pan Am’s significant and consistent

financial losses. Finding that this court had misconstrued the

scope of its jurisdiction under the RLA, the First Circuit

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vacated the injunction and remanded for further proceedings. See

Air Line Pilots II, 399 F.3d at 106. That decision decisively

rejected all but one of ALPA’s theories for judicial

intervention. See id. at 98-105.

The First Circuit defined the sole issue surviving appeal as

whether “Pan Am was shut down only because it was possible to

transfer its union-flown routes to a non-union affiliate--and, if

so, that a major dispute was thereby created.” Id. at 103. The

court noted that the decision to close a business, even a

unionized business, is at the prerogative of the owners. Id. at

100. Thus, when dealing with a business decision to shut down a

unionized operation, so long as the operation is actually

terminated, and would have been “regardless of the availability

of a non-union affiliate as a vehicle for picking up the pieces

of [the] abandoned business, the RLA itself creates no

restrictions either on the company that is going out of business

or on the affiliate that is seeking to salvage the defunct

company’s operation.” Id. at 101. 

A major dispute under the RLA may arise from the shutdown of

a unionized business only where the employer’s sole purpose for

shutting down the business was to allow it to transfer union work

to a non-union affiliate. Id. at 102. Accordingly, the First

Circuit stated that ALPA may obtain judicial relief only if it

can show that the defendants’ proffered business justification is

a “shell game” or a “subterfuge.” Id. The court found that ALPA

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had not met that high standard the first time around. See id. at

103. But, although “it seems a long shot,” the court concluded

that ALPA should be given an opportunity to establish that the

defendants’ singular purpose in shutting down Pan Am was to

escape the terms of the CBA. Id.

On remand, this court permitted ALPA to seek further

discovery directed toward that narrow issue. See Order (July 8,

2005) at 5. The court did not impose any temporal limitation,

allowing ALPA to supplement the record with material relating to

the time period preceding the evidentiary hearing. See id.

Discussion

The defendants maintain that Pan Am was closed because of

its heavy financial losses. They argue that ALPA has failed to

proffer any evidence rebutting the legitimacy of management’s

financial decision to shut down Pan Am, let alone to establish

that Pan Am’s operation was terminated for the explicit purpose

of transferring union work to a non-union affiliate. As support,

the defendants assert that they informed the Federal Aviation

Administration (“FAA”) of the decision to close Pan Am at a

meeting in early May 2004, and it is undisputed that Pan Am then 

followed through with the shut down later that fall. The

defendants further point out that Boston-Maine was not granted

FAA authority to fly a large jet aircraft until mid-July 2004, at

least two months after the defendants assert that they first

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notified the FAA of their plans to shut down Pan Am. 

 ALPA argues that it has produced evidence showing that,

despite Pan Am’s undisputed losses, the defendants’ purported

rationale for shutting down Pan Am was merely a pretext to hide

the true motivation -- to make an end run around the CBA and the

union. ALPA catalogues evidence from which it claims a trier of

fact could reasonably infer an unlawful motivation. But much of

that evidence was already considered in the prior proceedings and

was dismissed by the First Circuit as insufficient to establish

an actionable dispute under the RLA. See Air Line Pilots II, 399

F.3d at 103 (“[A] finding of a major dispute is not sustainable

on the record as it now stands.”).

The only significant new information submitted by ALPA is

the deposition testimony of Robert Barnes, a former vice

president at Pan Am and Boston-Maine, concerning some off-hand

remarks made by David Fink, the CEO of both companies; the

declaration of Robert Burrell, an FAA supervisor, concerning the

timing of the defendants’ announcement of the plan to close Pan

Am; and the declaration of Kye Johanning, an employee of ALPA and

a purported financial expert, calling into question the

defendants’ business justification for shutting down Pan Am.

During his deposition, Barnes stated that Fink had informed

him of his intention to perform an “Emmett Kelley routine.” 

Barnes Dep. at 24. Barnes explained that “Emmett Kelley was a

clown who used to sweep a beam of light on the stage into a

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smaller and smaller pile and with a final sweep, it was gone.” 

Id. Barnes stated that Fink had “indicated that that’s what he

was doing with Pan Am, . . . and when he got done, there would be

nothing left for the Air Line Pilots Association.” Id.

ALPA also submits the declaration of Robert Burrell, an FAA

supervisor in Portland, Maine, to rebut the defendants’ assertion

that the decision to discontinue Pan Am’s operations was

announced to the FAA at a meeting that occurred months before

Boston-Maine received FAA authorization to operate large jet

aircraft. Burrell’s declaration states that, “[i]n response to

an inquiry by the Air Line Pilots Association . . . I caused a

search to be conducted of the records of the FAA’s Portland

Office as to meetings or correspondence between representatives

of our Office and the [defendants].” Burrell Decl. ¶ 5. Based

on his own recollection, and that of his colleagues in the

Portland office, Burrell believes that “the first time [the FAA]

was informed of a plan for Pan Am to cease operations was in July

2004, some time after Boston-Maine was granted initial authority

to add Boeing 727 aircraft to its FAA operating certificate.” 

Id. ¶ 6. 

Finally, ALPA submits a declaration from Kye Johanning, an

economic analyst employed in ALPA’s Economic and Financial

Analysis Department. Having reviewed the financial statements of

Pan Am, Boston-Maine, and the parent, Pan American Airlines, for

the years 2001 to 2005, Johanning concludes that Boston-Maine, at

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best, can only hope to duplicate the losses incurred by Pan Am. 

Johanning Decl. ¶¶ 12-18. Johanning puzzles at why the

defendants commenced with the time-consuming and expensive

procedure to procure authority for Boston-Maine to operate large

jet aircraft when Pan Am, its corporate sibling, already had such

authority. Id. ¶ 17. Johanning sees no “economic advantage to

the owners to operate two essentially identical airlines.” Id.

Moreover, Johanning finds the defendants’ rationale for closing

Pan Am “hard to believe because Pan Am had been losing money at a

very substantial rate for years, yet it continued to operate

until [Boston-Maine] had acquired the authority to replace it.” 

Id. ¶ 18. Furthermore, Johanning states, “if Pan Am’s losses

were the reason for the decision to shut it down, then logically

[Boston-Maine] would have been shut down as well, because its

losses were even worse than Pan Am’s.” Id. Finally, Johanning

opines, if Pan Am were truly concerned about labor costs, “it

could have sought to negotiate wage reductions with ALPA rather

than close down the airline.” Id. at ¶ 19.

The defendants move to strike substantial portions of the

Burrell declaration, including two attached exhibits, and all of

Johanning’s declaration. Because Burrell was not present for the

May 2004 meeting, and the crux of his declaration therefore

relies on the statements of other FAA personnel, the defendants

argue that those portions of the declaration constitute

inadmissible hearsay. See Fed. R. Evid. 801. The defendants

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also argue that the official investigation exception is not

applicable here, see Fed. R. Evid. 803(8)(C), and even if it

were, it would not provide an exception to “hearsay within

hearsay.” United States v. Mackey, 117 F.3d 24, 28-29 (1st Cir.

1997) (“[H]earsay statements by third persons . . . are not

admissible . . . merely because they appear within public

records.”).

Additionally, the defendants argue that the court should

strike Johanning’s declaration because ALPA failed to file an

expert report summarizing his opinions and reasoning. See Fed.

R. Civ. P. 26(a)(2)(B). Because the court concludes that

consideration of the disputed material will not help ALPA meet

the high standard for establishing a major dispute under the RLA,

it is unnecessary to rule on the motion to strike.

The new evidence submitted by ALPA does little to advance

its case. Barnes’s deposition testimony regarding Fink’s “Emmett

Kelley routine” comment is nothing more than cumulative evidence

of Fink’s animus toward ALPA. Similar statements by Fink had

already been revealed in the injunction proceedings, see Air Line

Pilots I, 360 F. Supp. 2d at 265 (noting that there was evidence

that “Fink regularly expressed his dislike for ALPA and even said

in March or April 2004, that ‘it was going to be smooth sailing

with Boston-Maine as soon as they got rid of all those union

jackasses . . . .’”), and did not impress the First Circuit, see

Air Line Pilots II, 399 F.3d at 102 n.9 (“evidence of generalized

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3At its height, Pan Am had authority to operate up to eight

Boeing 727 aircraft. See Air Line Pilots I, 360 F. Supp. 2d at

278. At the time of the injunction hearing, Guilford leased six

Boeing 727 aircraft to Pan Am, but only one to Boston-Maine. Id.

at 279. Moreover, Boston-Maine still does not have authorization

to provide international flights, and ALPA itself points out that

international flights are more profitable than domestic flights.

10

union animus, though perhaps relevant, is insufficient to

establish an unlawful scheme.”).

The Burrell declaration is similarly unavailing. Even

assuming arguendo that the defendants did not notify the FAA of

the planned shutdown of Pan Am until some point in July 2004

after Boston-Maine received permission to operate a large jet

aircraft, this hardly establishes that the defendants’ business

justification for shutting down Pan Am was a subterfuge. The

premise of ALPA’s argument is that the defendants intended to

circumvent the union by transplanting Pan Am’s business, root and

branch, into Boston-Maine. According to ALPA, “the triggering

event that led to the shutdown of Pan Am was not its financial

losses, but the ability of defendants finally to carry out their

plan to replace Pan Am with [Boston-Maine].” Mem. Opp’n Mot.

Summ. J. at 21. 

But, the record establishes that in July 2004, Boston-Maine

was not positioned to replace Pan Am. At that point, BostonMaine had only acquired FAA authority to operate a single large

jet aircraft domestically, not the fleet of aircraft that Pan Am

had authority to operate domestically and internationally.3

Moreover, as the First Circuit found important, the defendants

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4The court similarly finds insignificant the fact that the

minutes of two Pan Am meetings in May and July of 2004 omit

reference to the planned shut down of Pan Am. 

11

followed through with the shutdown of Pan Am notwithstanding

that, at that time, Boston-Maine was powerless to take over Pan

Am’s routes. See Air Line Pilots II, 399 F.3d at 102 (noting

that it was significant that Pan Am shut down operations and

surrendered its operating certificate “after the district court

had enjoined Boston-Maine from taking on Pan Am’s routes”).4

Finally, even accepting Johanning’s declaration, it only

establishes, at most, that the defendants made a poor business

decision to shut down Pan Am while continuing the Boston-Maine

operation. Nevertheless, as the First Circuit emphasized, the

decision to close a business is management’s prerogative and does

not trigger an obligation to bargain. Id. at 100. That better

solutions may have been available to the defendants does not

establish that their decision to close Pan Am was a sham. Id. at

102 (“If there is no subterfuge, the closure is in fact

legitimate and complete, and . . . the decision to close falls

outside the ambit of bargainable disputes under the RLA.”). 

Moreover, Johanning’s starting premise, that Boston-Maine

merely duplicates Pan Am, is flawed. As noted above, BostonMaine does not have the substantial fleet of large jet aircraft

that Pan Am had. It does, however, have a fleet of smaller

aircraft that Pan Am did not have. The defendants maintain that

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they expect Boston-Maine to eventually succeed where Pan Am

failed because of its lower maintenance and labor costs, and

because of the additional cash flow generated from its smaller

aircraft routes. 

Finally, Johanning claims that Boston-Maine was a worse

performer on a “margin basis” (i.e, losses as a percentage of

revenues). Johanning Decl. ¶ 13. But he concedes that “in

absolute terms,” Pan Am was the bigger loser. Id. Indeed,

looking at Johanning’s comparison for 2003 and 2004, it appears

Boston-Maine lost just over $19 million, while Pan Am lost more

than $45 million. Id. ¶¶ 12-13. The defendants were not

required to employ Johanning’s criteria to measure the

performance of the two airlines. Nor were they obligated to

negotiate a wage reduction with ALPA’s members before shutting

down Pan Am.

In the end, ALPA simply cannot meet the high bar that has

been set for judicial intervention in RLA cases. The court reads

the precedent to require, in business closure cases such as this,

nothing short of a smoking gun establishing that management was

motivated solely by an unlawful desire to rid itself of the

obligation to bargain with a union. The First Circuit found no

smoking gun in its review of the court’s initial decision, and

this court finds none now. ALPA’s claims fall short, as a matter

of law, of establishing a major dispute under the RLA. 

Therefore, ALPA has no recourse in this court. See Air Line

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Pilots II, 399 F.3d at 105.

Because the defendants are entitled to summary judgment, the

motions of both parties relating to trial are considered to be

moot.

Conclusion

For the foregoing reasons, the defendants’ motion for

summary judgment (document no. 153) is granted. The defendants’

motions to strike (document no. 163) and to exclude testimony

(document nos. 179, 180), and the plaintiff’s motion to take

trial depositions (document no. 173), are denied as moot. The

clerk shall enter judgment in favor of the defendants and close

the case.

SO ORDERED.

____________________________

Joseph A. DiClerico, Jr.

United States District Judge

October 3, 2006

cc: Jerry D. Anker, Esquire

R. Matthew Cairns, Esquire

Julie P. Glass, Esquire

Eric L. Hirschhorn, Esquire

Marie M. McPartlin, Esquire

Marcus C. Migliore, Esquire

William G. Miossi, Esquire

Gina M. Petro, Esquire

Andrew W. Serell, Esquire

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