AMR Corporation

CourtUnited States Bankruptcy Court, S.D. New York
DecidedDecember 17, 2019
Docket11-15463
StatusUnknown

This text of AMR Corporation (AMR Corporation) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AMR Corporation, (N.Y. 2019).

Opinion

UNITED STATES DISTRICT COURT USDC SDNY SOUTHERN DISTRICT OF NEW YORK DOCUMENT Peay nnn ee ELECTRONICALLY FILED JOHN KRAKOWSKI, KEVIN HORNER, DOC #: and M. ALICIA SIKES, DATE FILED: _§@ Ji? |t Plaintiffs-Appellants, Peale 17-CV-03237 (KMW) OPINION & ORDER AMERICAN AIRLINES, INC. and ALLIED PILOTS ASSOCIATION, Defendants-Appellees. aie Rasa asin as ae KIMBA M. WOOD, United States District Judge: John Krakowski, Kevin Horner, and M. Alicia Sikes (together, the “Appellants”) are pilots, currently employed by American Airlines, Inc. (“American”) and represented by the Allied Pilots Association (“APA”). They were employed by Trans World America (“TWA”) until it merged with American. In the adversary bankruptcy proceeding below, they bring several claims arising from American’s and APA’s treatment of former TWA pilots during and after the American-TWA merger. In a pair of decisions, the Bankruptcy Court, Hon. Sean H. Lane, dismissed all of Appellants’ claims, as follows: (1) a breach of contract claim against American, for failure to state a claim; (2) a breach of duty of fair representation claim against APA, as procedurally barred, under the law of the case doctrine, by the Bankruptcy Court’s prior dismissal of an identical claim in a separate adversary proceeding between the same parties; and (3) a claim that American colluded in APA’s breach of the duty of fair representation, because plaintiffs did not have a viable duty of fair representation claim, and, in any event, failed to adequately allege collusion. Appellants now appeal from the Bankruptcy Court’s orders dismissing their claims. For

the following reasons, the decisions of the Bankruptcy Court are AFFIRMED. BACKGROUND I. Relevant Facts Appellants are former TWA pilots who currently fly for American. (Second Amended Complaint (“SAC”) { 8.) In April 2001, American acquired TWA’s assets. (/d. P16.) In November 2001, American and APA executed a document called “Supplement CC”, which merged the former TWA pilots into American’s pilot seniority list. (/d. P17.) Under Supplement CC, former TWA pilots were integrated into American’s seniority list with none or a fraction of the seniority they had earned at TWA. (Jd. PPP 18-19.) To compensate the former TWA pilots for their loss of seniority, Supplement CC established what the parties call a “protective fence” in TWA’s former hub of St. Louis, Missouri. The “fence” guaranteed a certain number of captain and first officer positions for St. Louis-based former TWA pilots, and thus permitted former TWA pilots to fly St. Louis-based routes that would otherwise be unavailable due to their reduced seniority. (Jd. PIP 19-20.) Supplement CC was a supplement to American’s then-existing collective bargaining agreement with APA (the “Old CBA”). When American and APA agreed to Supplement CC, the former TWA pilots were not represented by APA. They were represented by a different union. (/d. 27.) After the acquisition, however, the former TWA pilots became part of the bargaining unit of American pilots represented by APA. (dd. P29.) Roughly a decade later, in November 2011, American filed for bankruptcy. (dd. P 34.) As part of the bankruptcy proceedings, the Bankruptcy Court granted American’s request to abrogate the Old CBA. (dd. P36.) The Old CBA and its supplements, including Supplement CC, became null and void as of September 5, 2012. (dd. |P 37.) In the course of negotiating a replacement collective bargaining agreement, American and

APA signed a letter of agreement called “LOA 12-05”.!__ It had two main provisions. _ First, the seniority list established by Supplement CC would remain in place, notwithstanding the termination of Supplement CC. (LOA 12-05 at 1, Appendix to Appellants’ Opening Brief (“App’x”) at 134). Second, the protective “fence,” which gave preferential flying rights to former TWA pilots on St. Louis-based routes, would not remain in place. (SAC P39.) APA and American agreed to appoint an arbitrator to decide how to compensate the former TWA pilots for the loss of the “fence.” The parties agreed that the arbitrator would not be permitted to revise the seniority list established by Supplement CC but could award other types of compensation. (LOA 12-05 at 1.) Il. Procedural History Appellants have brought many cases against American and APA, several of which are now adversary proceedings in American’s bankruptcy case. The parties refer to these adversary proceedings, chronologically by date of filing, as Krakowski I and Krakowski II. The earlier case is Krakowski I. See Krakowski v. Am. Airlines, Inc. (Inre AMR Corp.), Case No. 11- 15463, Adv. Proc. No. 13-01238 (Bankr. S.D.N.Y.) [hereinafter Krakowski I]. The instant matter is known as Krakowski II. See Krakowski v. Am. Airlines, Inc. (In re AMR Corp.), Case No. 11-15463, Adv. Proc. No. 14-01920 (Bankr. S.D.N.Y.) [hereinafter Krakowski II]. A brief description of the proceedings in Krakowski I and Krakowski II follows.’

1 Although Appellants did not include the New CBA in their appendix on appeal, they appended it to the First Amended Complaint. The Bankruptcy Court properly considered the New CBA and its supplements, including LOA 12-05, in deciding APA’s motion to dismiss. See In re AMR Corp., 538 B.R. 213, 217 (Bankr. S.D.N.Y. 2015) (citing Cortec Indus. Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991)). 2 There is a third case, which the parties call Krakowski II/, but it is not relevant to the present appeal. See Krakowski v. Am. Airlines (In re AMR Corp.), Case No. 11-15463, Adv. Proc. No. 16-01138 (Bankr. $.D.N.Y.). 3 For clarity, all filings in these cases, regardless of the court in which they were filed, are cited as “Krakowski I” or “Krakowski II.”

a. Proceedings in Krakowski I Krakowski I was initially filed in the Eastern District of Missouri in 2012. See Krakowski I, 927 F. Supp. 2d 769, 771 (E.D. Mo. 2013). It was transferred to the Bankruptcy Court for the Southern District of New York on March 4, 2013. Jd. at 776. In Krakowski I, Appellants claimed APA breached its duty of fair representation to former TWA pilots by agreeing, in the New CBA, to compensate former TWA pilots for the loss of the protective “fence” via an arbitration procedure that could not modify the unfair seniority list established by Supplement CC. Appellants also claimed American colluded in this breach. See Krakowski I, 199 L.R.R.M. (BNA) 3584, 2014 WL 2508729, at *4-6 (Bankr. S.D.N.Y. June 3, 2014). On June 3, 2014, the Bankruptcy Court dismissed the complaint for failure to state a claim, reasoning that APA’s agreement not to modify the seniority list when negotiating the New CBA did not breach APA’s duty of fair representation. See id. On October 2, 2019, the District Court, Hon. Lewis Kaplan, affirmed the Bankruptcy Court’s dismissal of the complaint.‘ See Krakowski I, 2019 WL 4857640, at *7 (S.D.N.Y. Oct. 2, 2019) (Kaplan, J.). b. Proceedings in Krakowski II The instant case, Krakowski II, was initially filed in the Eastern District of Missouri on May 1, 2013. (App’x at 9-19). Appellants filed their First Amended Complaint six days later, on May 7, 2013. (First Amended Complaint (“FAC”), App’x at 20-31.). Thereafter, the case was transferred to the Southern District of New York on motion of the defendants, where it was referred to the Bankruptcy Court. (App’x at 8.)

4 Judge Kaplan also affirmed several other decisions of the Bankruptcy Court that are not directly relevant to the appeal now before the Court, See Krakowski J, 2019 WL 4857640, at *6—13.

The First Amended Complaint in Krakowski II made three claims. In Count One, Appellants alleged that American breached the New CBA by placing former TWA pilots on American’s seniority list according to Supplement CC, rather than crediting them for seniority they earned at TWA.

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