SEAN H. LANE, UNITED STATES BANKRUPTCY JUDGE.
Before the Court are the Defendants' motions to dismiss [ECF Nos. 40, 41]
The factual background of this case is set forth in the Court's most recent decision in this case, familiarity with which is assumed. See Krakowski v. Am. Airlines, Inc. (In re AMR Corp.), 538 B.R. 213 (Bankr. S.D.N.Y. 2015) (the "September 2015 Decision"). The parties and events involved have been the subject of extensive litigation before this Court in several cases, resulting in numerous other written decisions. See Krakowski v. Am. Airlines, Inc. (In re AMR Corp.), 536 B.R. 360 (Bankr. S.D.N.Y. 2015); Krakowski v. Am. Airlines, Inc. (In re AMR Corp.), 2015 WL 2414750 (Bankr. S.D.N.Y. May 19, 2015); Krakowski v. Am. Airlines, Inc. (In re AMR Corp.), 2014 WL 2508729 (Bankr. S.D.N.Y. June 3, 2014). The Court takes judicial notice of these decisions, as they provide much needed context for the motions now before the Court.
In April 2001, American acquired the assets of TWA. Second Amended Compl. ¶ 16. Shortly thereafter, American and the APA executed Supplement CC, which modified the pilot seniority list at American to include the former TWA pilots, while it stripped them of much of their existing seniority at TWA. Id. ¶¶ 17-19. Under Supplement CC, roughly half of these former TWA pilots were placed at the bottom of American's seniority list, while others were integrated into the list but retained only a fraction of the seniority that they held at TWA. Id. ¶¶ 18-19.
To compensate for this loss of seniority, Supplement CC created a "protective fence" in TWA's former hub at St. Louis. Id. ¶ 20. The protective fence set aside a minimum number of Captain and First Officer positions in St. Louis for which these former "legacy" TWA pilots were given preferential bidding. Id. "Thus, while reducing the seniority of legacy TWA pilots
In November 2011, American filed for Chapter 11 protection. Second Amended Compl. ¶ 34. American subsequently obtained the Court's permission to abrogate its then-existing collective bargaining agreement (the "Old CBA") with the pilots and their union (the APA) under Section 1113 of the Bankruptcy Code. Id. ¶ 36; see also In re AMR Corp., 477 B.R. 384, 454 (Bankr. S.D.N.Y. 2012) (finding that the Debtors established that changes were necessary to the collective bargaining agreement and rejecting many of the APA objections, but denying the Debtors' motion under Section 1113 of the Bankruptcy Code without prejudice because the Debtors failed to show that certain proposed changes were justified by either reference to the Debtors' business plan or the practices of the Debtors' competitors); In re AMR Corp., 478 B.R. 599, 602 (Bankr. S.D.N.Y. 2012) (granting the Debtors' renewed motion under Section 1113 of the Bankruptcy Code). The Old CBA was void as of September 5, 2012. Second Amended Compl. ¶ 37.
American and the APA subsequently negotiated a new collective bargaining agreement for its pilots, which took effect on January 1, 2013 (the "New CBA"). Id. ¶¶ 39, 44. At the same time, American and the APA entered into a letter agreement to continue using the same pilot seniority list that had been utilized under the Old CBA ("LOA 12-05"). See New CBA at LOA 12-05;
In their first amended complaint (the "First Amended Complaint") [ECF No. 1-9], the Plaintiffs raised a variety of claims based on the treatment of these legacy TWA pilots. Count I of the First Amended Complaint asserted that through the continued use of the seniority list under the Old CBA, American breached the terms of the New CBA. See First Amended Compl. ¶¶ 38-40. Count II asserted that by agreeing to use the old seniority list, the APA
In the September 2015 Decision, the Court dismissed Counts I and III in their entirety. See Krakowski, 538 B.R. at 225. As to Count I, the Court held that American's use of the old seniority list did not breach the terms of the New CBA. See id. at 218-21. On Count III, the Court found the Plaintiffs' conclusory allegations insufficient to state a claim for collusion against American, but ruled that the Plaintiffs could amend their complaint to adequately plead a claim against American for collusion in the APA's alleged breach of its duty of fair representation. See id. at 224-25.
As to the remaining claim for breach of the duty of fair representation against the APA, the Court dismissed the portion of Count II that relied upon the breach of contract claim asserted in Count I. See id. at 222-23. The Court, however, left open two other theories of liability under Count II. See id. at 223-24. These theories alleged that the APA breached its fiduciary duty to the legacy TWA pilots based on two actions:
First Amended Compl. ¶ 49; see also Second Amended Compl. ¶ 42.
The Court noted that these claims did not relate to the alleged breach of the New CBA but instead concluded that they could be construed to assert a claim during the discrete period of time after the abrogation of the Old CBA in September 2012 and before the Defendants agreed to enter into the New CBA in December 2012 (the "Post-Abrogation Period"). Krakowski, 538 B.R. at 223-24. With respect to these surviving claims, the Court stated,
Id. at 223 (emphasis added). The Court characterized these surviving claims as the APA having "violated its duty by agreeing to use the old seniority list immediately after the Old CBA was abrogated even though the job protections of Supplement CC were gone." Id. at 224 (emphasis added).
The Court also distinguished the surviving aspects of Count II from the claims asserted in the related case of Krakowski v. Am. Airlines, Inc., et al., Adv. Proceeding No. 13-01283 ("Krakowski I"), which involves the same parties. In Krakowski I, the Plaintiffs initially alleged that the APA violated its duty of fair representation by entering into an agreement with American to establish an arbitration process to replace the protections for legacy TWA pilots under Supplement CC, but that restricted the arbitrator from modifying the seniority of the legacy TWA pilots. In the September 2015 Decision, the Court noted that the claims in the First Amended Complaint
At a subsequent status conference, the Court discussed the scope of its ruling on Count II. In response to a request for clarification on the remaining issues in the case, the Court set forth the surviving claim:
(Hr'g Tr. 28:24-29:10, Oct. 15, 2015). In a later colloquy, the Court further elaborated:
(Hr'g Tr. 30:1-11, Oct. 15, 2015) [ECF No. 50].
On October 20, 2015, the Plaintiffs filed the Second Amended Complaint that is the subject of these motions. Instead of amending their complaint to address the remaining claim under Count II — one for the period after the Old CBA was abrogated and before entry of the New CBA — the Plaintiffs revised the complaint to include a new theory of liability relating to the New CBA. More specifically, the Second Amended Complaint alleges liability based on American offering, and the APA accepting, a new collective bargaining agreement in December 2012 that was free of Supplement CC's protective fences but implemented a seniority list that mirrored the list created by Supplement CC. Second Amended Compl. ¶ 39-40. The Defendants contend that this new theory is, in fact, an old one and must be dismissed given the Court's prior rulings. The Court agrees.
Federal Rule of Civil Procedure 12(b)(6), made applicable by Bankruptcy Rule 7012, provides that a complaint must be dismissed if it fails to state a claim upon which relief can be granted. In analyzing a motion to dismiss under Rule 12(b)(6), a court looks to whether a plaintiff has pleaded "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A court must proceed "on the assumption that all
Claims dismissed in a prior court decision are barred by the law of the case doctrine. That doctrine provides that "[w]hen a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983); see also De Johnson v. Holder, 564 F.3d 95, 99 (2d Cir. 2009). "Law of the case rules have developed to maintain consistency and avoid reconsideration of matters once decided during the course of a single continuing lawsuit. These rules do not involve preclusion by final judgment; instead, they regulate judicial affairs before final judgment." In re PCH Assocs., 949 F.2d 585, 592 (2d Cir. 1991). "Courts apply the law of the case doctrine when their prior decisions in an ongoing case either expressly resolved an issue or necessarily resolved it by implication." Aramony v. United Way of Am., 254 F.3d 403, 410 (2d Cir. 2001) (internal citations and quotation marks omitted). It "operates to create efficiency, finality, and obedience within the judicial system." Allapattah Servs., Inc. v. Exxon Corp., 372 F.Supp.2d 1344, 1363 (S.D. Fla. 2005); see also Liani v. Baker, 2010 WL 2653392, at *11 (E.D.N.Y. June 28, 2010) ("Law of the case is a doctrine of judicial efficiency that allows a court to avoid time-consuming relitigation of issues already decided. It is not a substantive limit on the power of the court, however, and every court retains the authority to reconsider its prior non-final rulings.") (internal citations and quotations omitted); McGee v. Dunn, 940 F.Supp.2d 93, 100 (S.D.N.Y. 2013) ("The objective of the law of the case doctrine includes promoting efficiency and avoiding endless litigation by allowing each stage of the litigation to build on the last and not afford an opportunity to reargue every previous ruling.") (internal citations and quotations omitted).
Applying the doctrine here, the Court concludes that the claims in the Second Amended Complaint are barred by this Court's prior decisions in Krakowski I and in this case.
It is necessary to revisit the procedural background in Krakowski I to explain why this is so. In the New CBA, American and the APA settled on a binding arbitration process to replace the job protections lost through the abrogation of Supplement CC, but also agreed to preclude the arbitrator from modifying the legacy TWA pilots' seniority as a possible remedy. Krakowski, 2014 WL 2508729, at *2. This arrangement was the basis for the Plaintiffs' claim in Krakowski I that the APA had breached
Id. The Court held that the Plaintiffs had not alleged anything that would allow the Court to conclude that the APA intended to unlawfully discriminate against the legacy TWA pilots or that the APA had made this decision without a legitimate union objective. Id. at *4-5. The Court also noted that the Plaintiffs had filed their action before the arbitration was completed and thus were essentially arguing that no possible remedy arising out of the arbitration could ever be sufficient. Id. at *5. Accordingly, the Court observed that the actual harm to the Plaintiffs was speculative at that time. Id.
The Plaintiffs subsequently supplemented the complaint in Krakowski I, again alleging that the APA breached its duty of fair representation. With numerous breaches asserted, the Court divided the Plaintiffs' claims into three general categories: (1) the APA's failure to bargain about the termination of Supplement CC and agreement to terminate Supplement CC without securing equivalent job protections; (2) the APA's agreement to preclude the Supplement CC arbitrators from addressing seniority and the APA's failure to pursue something to "replicate" the Supplement CC job protections; and (3) claims that the Supplement CC arbitration was not procedurally appropriate or fair, including alleged deficiencies in the selection of the arbitrators, the participants, and the lawyers. Krakowski, 536 B.R. at 369. The Court dismissed all of the Plaintiffs claims, save for the third set of allegations regarding how the arbitration was conducted. See id. at 372-74. In so doing, the Court noted that it had previously rejected the Plaintiffs' position that the only satisfactory remedy in the arbitration required a modification of the seniority for the legacy TWA pilots. See id. at 372.
The Court concludes that the Plaintiffs' Second Amended Complaint is simply a thinly veiled attempt to make an end run around the prior rulings in Krakowski I. The Plaintiffs' allegations in the Second Amended Complaint again revolve around the failure to change the seniority of the legacy TWA pilots. The Plaintiffs now assert that the APA breached its fiduciary duty by agreeing to preserve the seniority list created by Supplement CC without the protective fences. See Second Amended Compl. ¶ 42. But this is essentially the same claim dismissed in Krakowski I, where these same Plaintiffs alleged that the APA breached its fiduciary duty by agreeing in the New CBA to terminate Supplement CC and to limit any potential
The Plaintiffs assert their claim in the Second Amended Complaint is distinct from the prior litigation. They argue that "once defendants implemented the result of that arbitration, the TWA pilots were ... damaged by defendants' agreement at issue in this case to use a seniority list that mirrored the old list, but without Supplement CC's protections." Plaintiffs' Opposition to Defendants' Motions to Dismiss Second Amended Complaint at 10-11 (the "Opposition") [ECF No. 44]. But this argument is just a repackaging of the Plaintiffs' earlier challenge to the Defendants' establishment of an arbitration process that left in place the existing seniority list while seeking a substitute for Supplement CC's job protections. See Krakowski, 2014 WL 2508729, at *4-6 (ruling that Plaintiffs failed to state a claim that the APA breached its duty of fair representation by agreeing to terminate Supplement CC and to limit any potential relief in the arbitration from altering the seniority of legacy TWA pilots); see also Krakowski, 536 B.R. at 369-72.
Even putting aside Krakowski I, the Second Amended Complaint is also at odds with the guidance provided by the Court in this case about what claims survived dismissal. As the Court made repeatedly clear, the surviving claims covered the Post-Abrogation Period but before the entry of the New CBA. See Krakowski, 538 B.R. at 223-24; (Hr'g Tr. 28:25-29:3, Oct. 15, 2015). But the Second Amended Complaint does not allege any
Krakowski, 538 B.R. at 223 (reference to ¶¶ 49(B) and (C) of the First Amended Complaint) (emphasis added).
The Court's rulings about the scope of the surviving claims in this case reflected a concern about the duplication of claims and inefficiency in the litigation of these disputes. The Court attempted to clarify — without success — the remaining claims so as to avoid duplication with Plaintiffs' other cases and other claims that have already been dismissed. Indeed,
Given the Court's dismissal of the duty of fair representation claims against the APA, the Court must also dismiss the claims of collusion against American. See United Indep. Flight Officers, Inc. v. United Air Lines, Inc., 756 F.2d 1274, 1283 (7th Cir. 1985) ("If the RLA-based [duty of fair representation] claim against the union is dismissed, the claim against the employer must also be dismissed.") (citing Graf v. Elgin, Joliet & E. Ry. Co., 697 F.2d 771, 781 (7th Cir. 1983)).
Dismissal of the collusion claim is also required because the Second Amended Complaint fails to allege any conduct that could constitute collusion on the part of American in any alleged breach of that duty. The Plaintiffs' allegations of collusion here remain as perfunctory and conclusory as those dismissed in the First Amended Complaint. While "a court must accept as true all of the allegations contained in a complaint," that is not true for legal conclusions. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). As the Supreme Court has counseled, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). The Plaintiffs have not alleged facts evidencing bad faith, discrimination,
As for the Plaintiffs' first assertion, the mere negotiation of a collective bargaining agreement cannot be the basis of a collusion claim against an employer. "[S]imple `negotiation between [an] employer and union is not evidence of collusion.'" Cunningham v. United Airlines, Inc., 2014 WL 441610, at *5 (N.D. Ill. Feb. 4, 2014) (quoting Air Wisc. Pilots Prot. Comm. v. Sanderson, 124 F.R.D. 615, 617 (N.D. Ill. 1988)); see also United Indep. Flight Officers, Inc. v. United Air Lines, Inc., 756 F.2d 1274, 1282-83 (7th Cir. 1985) (rejecting "patently fallacious" argument that negotiation of a collective bargaining agreement between a carrier and union "necessarily entails collusion"). As the Plaintiffs have not alleged any conduct by American beyond its negotiation of a new agreement with the APA, this first allegation standing alone does not state a claim.
The Plaintiffs' second and related allegation fares no better. The Plaintiffs assert that they have adequately plead knowledge on the part of American of the APA's breach, arguing that case law in the Second Circuit permits employees to add their employer as a defendant merely "by alleging the employer's knowledge of or complicity in the union's breach." Opposition at 11-12 (quoting Krakowski, 536 B.R. at 367). But the cases cited by the Plaintiffs apply that standard in a hybrid claim, where a duty of fair representation claim against a union is combined with an allegation that the employer has breached the collective bargaining agreement. See Long Island City Lodge 2147 v. Ry. Express Agency, Inc., 217 F.Supp. 907 (S.D.N.Y. 1963); Ferro v. Ry. Express Agency, Inc., 296 F.2d 847 (2d Cir. 1961); N.L.R.B. v. Am. Postal Workers Union, 618 F.2d 1249 (8th Cir. 1980); Fruin-Colnon Corp. v. N.L.R.B., 571 F.2d 1017 (8th Cir. 1978); Lummus Co. v. N.L.R.B., 339 F.2d 728 (D.C. Cir. 1964); Am. Postal Workers Union, Local 6885, 665 F.2d 1096 (D.C. Cir. 1981). As no such breach of contract claim exists here, there is no hybrid claim upon which to anchor a conclusory claim of collusion against American.
Absent such a hybrid claim, a plaintiff seeking to hold an employer liable for collusion in connection with entering a collective bargaining agreement that is alleged to violate a union's duty of fair representation must allege conduct by the employer evidencing bad faith, discrimination, or hostility towards the plaintiffs. See, e.g., Rakestraw v. United Airlines, Inc., 765 F.Supp. 474, 493-94 (N.D. Ill. 1991) (dismissing claim against carrier even though carrier was aware of the animosity between the union and the minority group because there was no evidence that the carrier "acted in bad faith or discriminated against plaintiffs in accepting [the union's] proposal."), aff'd in relevant part, rev'd in part, 981 F.2d 1524 (7th Cir. 1992); Cunningham, 2014 WL 441610, at *6 (holding that potential knowledge of union discrimination against its members is not enough to support a finding of collusion by the carrier, absent extreme factual scenarios). No such allegations have been made here. It is not "appropriate to impose liability
Am. Airlines Flow-Thru, 2015 WL 9204282, at *3; see also Am. Postal Workers Union, Local 6885, 665 F.2d at 1108-09 ("The [employer] was required only to bargain in good faith with the employees' exclusive representative, and, in so doing, it was expected to represent its own interests, not those of the employees."); Cunningham, 2014 WL 441610, at *6 ("`[T]he employer must in most circumstances be able to rely on the union's disposition' in spite of some employee objections; and it would have a `detrimental effect on labor-management relations' if an employer were `forced to ignore union representations and take the initiative in dealing with employees whenever it suspects a discriminatory union motive.'") (quoting Carroll v. Bhd. of R.R. Trainmen, 417 F.2d 1025, 1028 (1st Cir. 1969) (internal quotation marks omitted)).
For the reasons stated above, the Court grants the Defendants' motions to dismiss the Second Amended Complaint in its entirety. The Defendants should settle an order on three days' notice. The proposed order must be submitted by filing a notice of the proposed order on the Case Management/Electronic Case Filing docket, with a copy of the proposed order attached as an exhibit to the notice. A copy of the notice and proposed order shall also be served upon counsel to the Plaintiffs.