DANIEL DEMETRIS; WILLIAM BURKE; DANIEL BURSTEIN; PATRICK COLLINS; RICHARD GORGAS; PAUL HERFEL; ROBERT MARINI; ABDUL MORANI; PAUL MORRONE; ROBERT PALACEK, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant-Appellee. MARK LETBETTER; MIKE MCDONALD; RICK ARNEGARD; WILLIAM BELL; WILLIAM BLACK; LONNIE BRADBURY; JOHN BREEDEN; ROGER BROWN; SCOTT BROWN; JOHN BYNUM; MIKE CODY; JOHN CRAWFORD; BILLIE CUMMINS; GEORGE DANKER; DON DRAPER; MICHAEL ELMORE; WADE FAUST; JERRY FRAZIER; KEVIN GORREMANS; MARY GORREMANS; JAMES HAYDEN; BRENDA HIGLEY; RANDY HOLLAND; JIM BOB JACKSON; ALAN KEITH; EARL KUPPINGER; SOREN LOHMAR; DEBORAH MCDANIEL; JOHNNY MCDANIEL; MIKE MCNAMARA; STEVE NUNN; MIKE REYES; GEORGE RODRIGUEZ; MIKE SHARP; JERRY SHUPE; CURTIS SIMER; ROBERT SOMMERS; RONALD SWAN; TERRANCE THOMAS; BILL THORSON; JIM TROSKEY; JAMES WALL; LARRY WEBER; CHOKUSHIN URASAKI; STEVE ABSHIER; RALPH BACON; RONNIE BERTRANG; TRAICE BRYANT; DAN BURKE; KEVIN CALMAN; DONALD CAUDLE; JERRY COLLARD; DOUG CREEKMORE; HUGH COOPER; BARBARA DEJEAR; BRYAN DESHAZO; LIDIO A. DOBRICH; DAVID ELDER; JOHN ELLER; MIKE ELLER; NED ELZO; RON ENGLES; DONALD FARRIS; ROBERT FLYNN; RANDY FORRESTER; JESSE FOSTER; STEVE FREGARA; PAUL GOULET; MARION GREENWALT; PHIL HALLMAN; MCKAYLA HARPER; SCOTT HERMANSON; LARRY HOLMES; ROGER KEMP; DANIEL KITCHENS; LARRY LAWSON; JACK LOFGREN; PATRICE MANNS; EDWARD W. MARRACCINI; FARREN MAYFIELD; GAIL MAYFIELD; GREG MCBRIDE; FRANK MEFFORD; KEN MILLER; DANNY MOORE; GERALD MURRAY; JAMES POTTEBAUM; JOHN REED; ABRAHAM REICHMAN; SHARON RITTER; BEN ROUNDTREE; GARY RUNYON; MARY RUNYON; ROGER SCHULTZ; TIM SISNEY; JOSEPH W. SMITH; RONALD SMITH; STEVE ULLRICH; SUSAN VIRDELL; MITCH WALLACE; TERRY WALLS; KENNETH WARREN; ERIC WHALEY; RAY WHITE; GLENDA WILKERSON; MIKE WILLIAMS; DON WOODRICH; JOHNNY YEARY; SAM YORK; STEVEN JONES, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, ROY HAILE, Petitioner-Appellant,
LOCAL 514, TRANSPORT WORKERS UNION OF AMERICA; TRANSPORT WORKERS UNION OF AMERICA, Defendants-Appellees.
and Submitted December 13, 2016 San Francisco, California
Amended July 5, 2017
from the United States District Court for the Northern
District of California D.C. Nos. 3:13-cv-05566-VC,
3:14-cv-04075-VC Vince G. Chhabria, District Judge, Presiding
Michael A. Caddell (argued), Cynthia B. Chapman, and Amy E.
Tabor, Caddell & Chapman, Houston, Texas, for
K. Chan (argued) and Stephen P. Berzon, Altshuler Berzon LLP,
San Francisco, California; Richard Edelman, Mooney Green
Saindon Murphy and Welch PC, Washington, D.C.; for
Defendant-Appellee Transport Workers Union of America,
P. Patterson, Beeson Tayer & Bodine APC, Oakland,
California; Caroline B. Lapish, Norman Wohlgemuth Chandler
Jeter Barnett & Ray, Tulsa, Oklahoma; for
Defendant-Appellee Local 514, Transport Workers Union of
Before: Diarmuid F. O'Scannlain, Ronald M. Gould, and
Milan D. Smith, Jr., Circuit Judges.
panel filed an amended opinion affirming the district
court's dismissal of two consolidated actions brought
under the Railway Labor Act, in which union members alleged
that a union breached the duty of fair representation in the
decision to distribute the proceeds of a bankruptcy
settlement to all of its members unevenly.
Airlines, Inc. and American Eagle Airlines, Inc. filed for
Chapter 11 bankruptcy and negotiated new collective
bargaining agreements with Transport Workers Union of
America, AFL-CIO, which represented mechanics, fleet service
workers, and other laborers. The new agreements cut pension
and medical benefits for union members and granted the union
a stake in the equity that would be granted to unsecured
creditors in the bankruptcy. The union and American also
negotiated an early separation program whereby more senior
union members could choose voluntarily to leave American in
exchange for lump-sum cash payments.
members who took advantage of the early separation program
alleged that the union breached its duty of fair
representation by excluding them from the bulk of the equity
distribution. The panel held that there was no breach of duty
because the union's conduct was not arbitrary,
discriminatory, or in bad faith.
O'SCANNLAIN, Circuit Judge:
decide whether a labor union's decision to distribute the
proceeds of a bankruptcy settlement to all of its members
unevenly violates its duty of fair representation.
Airlines, Inc., and American Eagle Airlines, Inc.
(collectively "American") filed for Chapter 11
bankruptcy in November of 2011. As part of its reorganization
process, American sought to reject and to renegotiate its
collective bargaining agreements. The Transport Workers Union
of America, AFL-CIO ("TWU") represented mechanics,
fleet service workers, and other laborers at American.
American presented TWU with a new, proposed labor agreement
on February 1, 2012.
series of negotiations, TWU agreed to new collective
bargaining agreements that drastically cut pension and
medical benefits for its members. Specifically, TWU: (1) made
scope-of-the-work concessions to American regarding
outsourcing and work-rules; (2) gave up non-accrued pension
benefits; (3) gave up certain life insurance benefits and
access to jointly-funded medical trust accounts; (4) agreed
to release various pre-petition claims and grievances against
American in exchange for a 3.1% stake in the equity that
eventually would be granted to unsecured creditors as part of
American's bankruptcy (such equity would also represent
compensation for the scope and pension concessions won by
American); and (5) agreed to release two grievances-referred
to by the parties as the 29(d) grievances-as part ...