Opinion ID: 608804
Heading Depth: 2
Heading Rank: 2

Heading: The Fagerland Settlement Monies

Text: 8 The long series of events leading to this action began in early 1990, when ALPA received a large payment from Pan Am under the terms of a 1985 grievance settlement. The settlement resolved a grievance dispute arising out of Pan Am's decision in 1984 to cease contributions to the A Plan, a pension plan it had established for its pilots. Under the settlement, reached in February 1985, Pan Am agreed to make a SAP of $35.125 million to Pan Am pilots who had participated in the A Plan prior to January 1, 1984 (eligible pilots). The SAP was to be paid in equal, yearly installments of $7.025 million from 1986 to 1990. The settlement required Pan Am to pay the SAP to ALPA, which was then to distribute the funds to the eligible Pan Am pilots. See Pan Am-ALPA Settlement at 3, reprinted in A. 47. 9 Before ALPA began distributing the settlement, a group of former Pan Am pilots who had been members of the A Plan filed suit against ALPA in the United States District Court for the District of Columbia, challenging the method ALPA used to determine each pilot's share of the payout. As a result of the suit, Fagerland v. Air Line Pilots Ass'n, Int'l, Civ.Action No. 86-3410, the SAP fund was placed in escrow and no distributions were made. In December 1989, the parties in Fagerland entered into a settlement agreement, which the District Court approved in a Consent Decree. See Settlement Agreement and Consent Decree, reprinted in A. 55 (Fagerland Consent Decree or Consent Decree). 10 Under the Consent Decree, the funds held in escrow were to be transferred to a trust account to be established by defendant ALPA, which will act as trustee and agent for distribution of this fund to the beneficiaries. Id. at 7. The Consent Decree provided that ALPA, as trustee and agent, was first to distribute a specified portion of the funds to the Fagerland plaintiffs, and was then to distribute the remaining funds to eligible [Pan Am] pilots who are not plaintiff class members pursuant to the instructions of the Pan Am [Master Executive Council]. 1 Id. at 8-11. The eligible pilots included appellants. The distribution plan set out in the Consent Decree applied to the four annual $7.025 million payments that Pan Am had already made (which were at the time held in escrow), and to the final payment Pan Am was scheduled to make in 1990. 11 In February 1990, after receiving the SAP funds from the first four annual payments, the Pan Am MEC adopted a resolution stating that: 12 all [Pan Am] pilots who are delinquent in dues, service charge or assessment payments to ALPA ... as of February 20, 1990 ... shall receive their full [SAP] payment minus all the money owed to ALPA in the form of back dues, service charges and/or assessments. 13 Plaintiffs' Statement of Material Facts to Which There is No Genuine Issue at 7, reprinted in A. 35. In March 1990, after the Fagerland plaintiffs had received their share of the SAP fund, ALPA distributed the remaining funds to eligible Pan Am pilots. In accordance with the MEC resolution, ALPA mailed SAP distribution checks to the pilots that included their share of the distribution from the first four Pan Am payments, less any alleged delinquency to ALPA as of February 20, 1990. ALPA withheld a total of $562,927.61 from the SAP distribution to satisfy the debts of delinquent Pan Am pilots, including $139,306.95 from appellants' share of the distribution ($100,160.47 of which constituted strike assessments, the remainder constituting other overdue fees). In December 1990, after Pan Am paid ALPA the last $7.025 million installment under the 1985 settlement agreement, ALPA made the final distribution of SAP funds to Pan Am pilots, and withheld an additional $22,340.31 from 13 of the appellants, as a further setoff for delinquency. In sum, ALPA withheld $161,647.26 from appellants.