Krakowski et al v. American Airlines, Inc. et al

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------------------------------------x
In re: Chapter 11
AMR CORPORATION, et al., Case No. 11-15463 (SHL)
Reorganized Debtors. (Confirmed)
-----------------------------------------------------------------x
JOHN KRAKOWSKI, et al.,
Plaintiffs,
v. Adv. No. 14-01920 (SHL)
AMERICAN AIRLINES, INC., et al.,
Defendants.
-----------------------------------------------------------------x
MEMORANDUM OF DECISION
A P P E A R A N C E S:
JACOBSON PRESS & FIELDS P.C.
Counsel for Plaintiffs
168 North Meramec Avenue, Suite 150
Clayton, Missouri 63105
By: Allen P. Press, Esq.
WEIL, GOTHSHAL & MANGES
Counsel for American Airlines, Inc.
767 Fifth Avenue
New York, New York 10153
By: Stephen Karotkin, Esq.
Alfredo R. Perez, Esq.
Stephen A. Youngman, Esq.
MORGAN LEWIS & BOCKIUS LLP
Counsel for American Airlines, Inc.
1111 Pennsylvania Avenue, N.W.
Washington D.C. 20004
By: Jonathan C. Fritts, Esq.
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 1 of 19

2
JAMES & HOFFMAN, P.C.
Counsel for the Allied Pilots Association
1130 Connecticut Avenue, NW, Suite 950
Washington, DC 20036
By: Edgar N. James, Esq.
Steven K. Hoffman, Esq.
Darin M. Dalmat, Esq.
STEPTOE & JOHNSON LLP
Counsel for the Allied Pilots Association
1330 Connecticut Avenue, NW
Washington, DC 20036
By: Filiberto Agusti, Esq.
Joshua R. Taylor, Esq.
SEAN H. LANE
UNITED STATES BANKRUPTCY JUDGE
Before the Court are the Defendants’ motions to dismiss the amended complaint (the
“Complaint”) (ECF No. 1-9),1 filed by Plaintiffs John Krakowski, Kevin Horner, and M. Alicia
Sikes on behalf of themselves and all persons similarly situated against Defendants American
Airlines, Inc. (“American”) and the Allied Pilots Association (the “APA”), which is the pilots’
union at American. The Plaintiffs are former Trans World Airlines (“TWA”) pilots now
employed by American.2
As part of American’s bankruptcy restructuring, it sought and received authority to reject
its then-existing collective bargaining agreement with the APA (the “Old CBA”). American
subsequently negotiated a new collective bargaining agreement for its pilots (the “New CBA”).
At the same time, American and the APA entered into a letter agreement to continue using the
1 Unless otherwise specified, references to the Case Management/Electronic Case Filing (“ECF”) docket are
to this adversary proceeding.
2 The Plaintiffs originally brought this action in the United States District Court for the Eastern District of
Missouri. The Missouri District Court transferred the case to this Court on March 19, 2014. See Memorandum and
Order, Case No. 4:13-cv-00838-JAR (ECF No. 43).
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 2 of 19

3
same pilot seniority list that had been utilized under the Old CBA. In the three counts of their
Complaint, the Plaintiffs allege that through the continued use of this seniority list: (1) American
breached the terms of the New CBA, (2) the APA breached its duty of fair representation, and
(3) American colluded in the APA’s breach of that duty.
For the reasons set forth below, the Court agrees with the Defendants that the Plaintiffs
have failed to state a claim for breach of the New CBA. The Court therefore grants the
Defendants’ motions to dismiss Count I of the Complaint, as well as the claims within Counts II
and III that depend upon the breach of contract claim. The Court, however, denies the motions
with respect to the remaining claims in Count II and III, finding that they sufficiently state a
claim for a breach of the duty of fair representation and do not rely upon the breach of contract
claim. As to the final collusion claim, the Court finds that the Plaintiffs have failed to set forth
facts sufficient to allege a plausible claim of collusion.
BACKGROUND
As is the case with any motion to dismiss, the Court accepts the allegations of the
Complaint as true. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In April 2001,
American acquired the assets of TWA. Compl. ¶ 8. Shortly thereafter, American and the APA
executed Supplement CC, which modified American’s pilot seniority list to include the former
TWA pilots, but stripped them of much of their seniority. Id. ¶ 10. Under Supplement CC,
roughly half of the TWA pilots were moved to the bottom of the seniority list, while others were
integrated into the list but retained a fraction of the seniority that they held at TWA. Id. ¶¶ 11–
12.
In November 2011, American filed for Chapter 11 protection. Id. ¶ 14. American
subsequently obtained the Court’s permission to abrogate the Old CBA under Section 1113 of
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 3 of 19

4
the Bankruptcy Code. Id. ¶ 15; see also In re AMR Corp., 477 B.R. 384, 401 (Bankr. S.D.N.Y.
2012); In re AMR Corp., 478 B.R. 599 (Bankr. S.D.N.Y. 2012). The Old CBA was void as of
September 5, 2012. Compl. ¶ 16. As of September 5, 2012, all American pilots were technically
at-will employees not subject to a valid collective bargaining agreement. Id. ¶ 17. American and
the APA subsequently negotiated the New CBA, which became effective on January 1, 2013. Id.
¶ 18.3
The New CBA outlined how pilot seniority would be determined. Id. ¶¶ 21–24. It also
expressly provided “that certain other rules in this Agreement stipulating specific methods and
procedures of applying system seniority shall govern such application of system seniority only to
the extent of the specific provisions of such rules.” See New CBA Section 13(D). The New
CBA included a letter of agreement numbered 12-05 (“LOA 12-05”) that was entered into
between American and the APA on January 1, 2013. See New CBA at LOA 12-05-1.4 LOA 12-
05 provided that “[American] and [the] APA agree that the TWA pilots’ existing seniority
placements on the Pilots’ System Seniority List are final and shall continue pursuant to Section
13 of the CBA notwithstanding the termination of Supplement CC and any preferential flying
rights associated with those seniority placements.” Id. While the phrase “preferential flying
rights” in Supplement CC is not relevant to the pending motions, these rights were described in a
prior decision in a related case between these parties in this Court:
3 The New CBA is attached as Exhibit 1 to the Complaint. Compl. ¶ 18.
4 Section 26(A) of the New CBA provides that:
Either party hereto may at any time propose, in writing, to the other party any amendment which it
may desire to make to this Agreement, and if such amendment is agreed to by both parties hereto,
such amendment shall be stated, in writing, signed by both parties and the amendment shall then
be deemed to be incorporated in and shall become a part of this Agreement.
New CBA, Section 26-1. LOA-12-05, which is appended to the New CBA, is by its terms incorporated as part of
the New CBA. See New CBA table of contents, listing numbered letters of agreement, including LOA 12-05.
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 4 of 19

5
“To compensate for . . . loss of seniority, Supplement CC created a ‘protective
fence’ in St Louis, creating minimum Captain and First Officer positions in St.
Louis and granting the legacy TWA pilots preferential bidding for these positions.
Thus, while reducing the seniority of legacy TWA pilots put them at a relative
disadvantage for purposes of bidding against a much larger number of American
pilots for positions on other routes, the protective fence guaranteed a certain
number of desired positions on routes from St. Louis with bidding advantages for
legacy TWA pilots.”
Krakowski v. American Airlines, Inc. (In re AMR Corp.), 2015 Bankr. LEXIS 1721, at *3–4
(Bankr. S.D.N.Y. May 19, 2015). In effect, American and the APA agreed to use the same
seniority list that was utilized under the Old CBA and Supplement CC, which meant that the
Plaintiffs and other former TWA pilots remained at a lower seniority level than their actual years
of service. Compl. ¶ 28.
DISCUSSION
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.”
Twombly, 550 U.S. at 570. A court must proceed “on the assumption that all the allegations in
the complaint are true.” Id. at 555. Taken as true, these facts must establish “more than a sheer
possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 677 (2007).
“However, this does not mean that a claim must contain ‘detailed factual allegations’ to survive a
Rule 12(b)(6) motion to dismiss.” Eastman Chem. Co. v. Nestle Waters Mgmt. & Tech., No. 11-
2589, 2012 WL 4474587, at *4 (S.D.N.Y. Sept. 28, 2012) (citing Talley v. Brentwood Union
Free Sch. Dist., 08 Civ. 790, 2009 WL 1797627, at *4 (E.D.N.Y. June 24, 2009)). Rather, the
court must determine “whether the well-pleaded factual allegations, assumed to be true, plausibly
give rise to an entitlement to relief.” Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010)
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 5 of 19

6
(citing Iqbal, 556 U.S. at 679). The court must also draw all reasonable inferences in favor of
the non-moving party. Ganino v. Citizens Utils. Co., 228 F. 3d 154, 161 (2d Cir. 2000).
A Rule 12(b)(6) motion is addressed to the face of the pleading. Goldman v. Belden, 754
F.2d 1059, 1065–66 (2d Cir. 1985). But the parties in this case have asked this Court to consider
events and documents that go beyond the pleadings, including the New CBA. As the New CBA
is both cited in and attached to the Complaint as an exhibit, it can be considered. See Cortec
Indus. Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991) (“[T]he complaint is deemed to
include any written instrument attached to it as an exhibit or any statements or documents
incorporated in it by reference.”); Fed. R. Civ. P. 10(c) (“A copy of a written instrument that is
an exhibit to a pleading is a part of the pleading for all purposes.”).
The Defendants seek to rely upon a second document, which is an arbitration decision
issued on March 12, 2014 by Richard I. Bloch, Esq. (the “Bloch Decision”). This arbitration
decision addressed pilot grievances on the very same issues raised in the Complaint. The
Plaintiffs acknowledge the arbitration took place and address the merits of it in their opposition.
But while the Plaintiffs do not object to the Court taking judicial notice of the decision, the
decision is not attached to or mentioned in the Complaint. As such, the Court takes judicial
notice only of the existence of the decision, but not of the truth of the facts contained within it.
See Global Network Commc’ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (“A
court may take judicial notice of a document filed in another court not for the truth of the maters
asserted in the other litigation, but rather to establish the fact of such litigation and related
filings. . . . Hence, although the final determination . . . may be public records of which a court
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 6 of 19

7
may take judicial notice, it may do so on a motion to dismiss only to establish the existence of
the opinion, not for the truth of the facts asserted in the opinion.”).5
A. Plaintiffs Fail to State a Claim that American Breached the New CBA
In Count One of the Complaint, the Plaintiffs assert that the pilot seniority list currently
used by American violates the terms of the New CBA. See Compl. ¶ 38 (“In breach of the New
CBA, American has put forth a System Seniority List which does not accord Named Plaintiffs
and members of the Class proper placement under the New CBA. . . .”) Specifically, the
Plaintiffs allege that the seniority level currently assigned by American to the former TWA pilots
does not correspond to these pilots’ “Occupational Date” and “Date of Hire,” as those terms are
defined by the New CBA and by American’s practices. As a result, the Plaintiffs assert that they
received a lower seniority placement than they should. But the Plaintiffs’ claim is inconsistent
with the plain language of the New CBA.
Courts apply traditional rules of contract interpretation to collective bargaining
agreements, so long as the rules are consistent with federal labor policies. Aeronautical Indus.
Dist. Lodge 91 of Int’l Ass’n of Machinists & Aerospace Workers, AFL-CIO v. United Techs.
Corp., 230 F.3d 569, 576 (2d Cir. 2000). “When provisions in the [collective bargaining
agreement] are unambiguous, they must be given effect as written.” Id. (citations omitted).
5 The Plaintiffs complain that American has gone beyond the pleadings in arguing about the arbitration. See
Plaintiffs’ Opp. to American MTD, at 4 n.1 [ECF No. 16]. The Plaintiffs request that they also be allowed to go
beyond the pleadings in responding to American’s argument by submitting the Declaration of Ben Thompson, one
of the aggrieved pilots involved in the arbitration. See id. Mr. Thompson’s Declaration discusses the experiences of
both himself and Theodore Case—a similarly situated pilot—during the grievance process with American. See
Thompson Decl., attached as Exh. 1 to the Plaintiffs’ Opp. to American MTD. But the Court cannot consider such
evidence on a motion to dismiss. See Sharette v. Credit Suisse Int’l, 2015 U.S. Dist. LEXIS 111966, at *25
(S.D.N.Y. August 20, 2015) (“The task of a court in ruling on a motion to dismiss is to ‘assess the legal feasibility of
the complaint, not to assay the weight of the evidence which might be offered in support thereof.’”) (quoting In re
Initial Pub. Offering Sec. Litig., 383 F. Supp. 2d 566, 574 (S.D.N.Y. 2005)). In any event, Plaintiffs’ request to
submit the Thompson Declaration to rebut American’s arguments is moot as the Court declines to consider the facts
set forth in the Bloch Decision.
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 7 of 19

8
“Only when provisions are ambiguous may courts look to extrinsic factors – such as bargaining
history, past practices, and other provisions in the [collective bargaining agreement] – to
interpret the language in question.” Id. Additionally, courts should attempt to read collective
bargaining agreements in such a way that no language is rendered superfluous. Id.
Pilot seniority is generally addressed under Section 13 of the New CBA. Section 13(D)
provides that:
Seniority shall govern all pilots in case of promotion, demotion, their retention in
case of reduction of force, their recall from furlough, their assignment or
reassignment due to expansion or reduction in force or schedules, and their choice
of vacancies . . . . This paragraph shall apply, provided that certain other rules in
this Agreement stipulating specific methods and procedures of applying system
seniority shall govern such application of system seniority only to the extent of
the specific provisions of such rules.
New CBA, Section 13(D) (emphasis added). Thus, the New CBA clearly contemplates
circumstances in which system seniority will be applied differently from the methods outlined in
Section 13. The Defendants assert, and this Court agrees, that LOA 12-05 is one such provision
in the New CBA that sets out “specific methods and procedures of applying system seniority.”
Under LOA 12-05, which has the same effective date as the New CBA, “[t]he Company
and [the] APA agree[d] that the TWA Pilots’ existing seniority placements on the Pilots’ System
Seniority List are final and shall continue pursuant to Section 13 of the CBA notwithstanding the
termination of Supplement CC . . . .” Id. By including LOA 12-05, therefore, the New CBA
explicitly provides that the Plaintiffs are to have the same placement on the System Seniority
List as existed under the Old CBA.
The Plaintiffs dismiss LOA 12-05 as a “red herring.” They argue that because the Court
granted American authorization to reject the Old CBA effective September 5, 2012, see In re
AMR Corp., 2012 WL 3834798 (Bankr. S.D.N.Y. Sept. 5, 2012), the pilots had no seniority
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 8 of 19

9
rights until the new seniority list was in place. See Opp. to APA MTD at 7 (ECF No. 15). The
Plaintiffs state that “[t]he pilots’ seniority rights, as reflected by the ‘Pilots’ System Seniority
List’ referred to in LOA 12-05 were only established when the New CBA was entered into on
January 1, 2013.” Id.
But the Plaintiffs’ argument misses the point. LOA 12-05 is expressly part of the New
CBA. See New CBA, Section 1(B)(2) (defining “Agreement” as “this collective bargaining
agreement between the [Allied Pilots] Association and the Company and all supplements and
letters of agreement between the [Allied Pilots] Association and the Company.”) (emphasis
added); New CBA, Section 26(A) (providing that amendments of the New CBA are “deemed to
be incorporated in and . . . become a part of” the New CBA). As part of the New CBA, LOA 12-
05 cannot be read to breach the very agreement of which it is a part. The letter memorializes the
agreement of American and the APA to alter the general seniority provisions of the New CBA as
they apply to the former TWA pilots. The Plaintiffs’ argument would render LOA 12-05
superfluous. Indeed, whether or not the pilots had seniority rights during the period between
abrogation of the Old CBA and the effective date of the New CBA is irrelevant to the breach of
contract claim, which rests upon the seniority rights that Plaintiffs have under the New CBA.6
Those seniority rights are squarely addressed by the language of LOA 12-05, which is
undisputedly part of the New CBA.
Even without considering LOA 12-05, the Plaintiffs’ contract claim would still fail given
default language in the New CBA about how seniority is determined. As the Plaintiffs correctly
6 American and the APA dispute the Plaintiffs’ argument that during the abrogation period, the pilots had no
seniority rights. Both argue that American never sought to abrogate the pilot seniority list or seniority provisions in
Section 13 of the Old CBA and the Court therefore never authorized such action. While the Court need not reach
this issue, it notes that American in fact continued to use the preexisting pilot seniority positions throughout the
abrogation period. See November 10, 2012, Letter from L. Einspanier to N. Roghair, attached as Exhibit 2 to
Declaration of Keith Wilson, Krakowski I, ECF No. 36-3 at 48–50.
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 9 of 19

10
note, a pilot’s placement on the System Seniority List is controlled by the “Occupational Date”
assigned to the pilot by American. The “Occupational Date” is discussed in Section 2(AA),
which states that “[o]ccupational seniority is used for determining placement on the Pilot System
Seniority list and for bidding purposes” and that “[a]ny references to seniority in this Agreement
are to Occupational Seniority, unless otherwise specified.” New CBA, Section 2(AA). That
same section goes on to define a pilot’s Occupational Date, as the pilot’s time with “the
Company”:
[g]enerally occupational seniority shall begin to accrue from the date a pilot is
first scheduled to complete initial new hire training with the Company and shall
continue to accrue during such period of duty except as provided in Sections 11
and 12 of this Agreement.
New CBA, Section 2(AA) (emphasis added). The “Company” is defined in the New CBA as
American Airlines, Inc. See New CBA at Section 1(8); see also New CBA at 1 (preamble
defining American Airlines, Inc. as the “Company”). Thus, the plain language of the New CBA
ties seniority to a pilot’s time at American.
The Plaintiffs argue that Section 2(AA) is inapplicable to them since they were
experienced pilots at the time they joined American and therefore had no need to participate in
“initial new hire training.” The Plaintiffs ask the Court to take judicial notice of this fact based
on the record regarding American’s acquisition of TWA in these proceedings. But the Plaintiffs
cite to nothing that supports this interpretation. See Plaintiffs’ Opp. to APA MTD at 5 n.4.7 In
any event, the Court rejects the Plaintiffs reading as contrary to the language in the agreement.
7 The Plaintiffs have pointed to nothing to support their contention that even a seasoned pilot hired by
American would simply be put in the pilot’s seat on his or her first day on the job, without going through any
training in or testing on American’s practices, rules and regulations. Such a matter is not an appropriate subject for
judicial notice. See Federal Rule of Evidence 201(c)(2) (“The court . . . must take judicial notice if a party requests
it and the court is supplied with the necessary information.”) (emphasis added); Guzman-Ruiz v. Hernandez-Colon,
406 F.3d 31, 36 (1st Cir. 2005) (refusing to take judicial notice where, among other things, “plaintiffs made no
attempt to specify what ‘adjudicable facts’ met the requirements of Federal Rule of Evidence 201.”).
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 10 of 19

11
The Plaintiffs allege that American’s general practice—since the acquisition of TWA and
continuing through to the present—has been to construe a pilot’s Occupational Date as the pilot’s
“Date of Hire” at TWA plus a time period of between 45 to 49 days thereafter. Compl. ¶¶ 20,
22. But the Plaintiffs’ interpretation flies in the face of the New CBA’s explicit language. The
New CBA clearly defines a pilot’s “Date of Hire” as “[t]he first day as an AA pilot.” New CBA,
Section 2(L) (emphasis added). The language of the New CBA makes no reference whatsoever
to service with any other employer, including TWA. Thus, the explicit language of both Section
2(AA) and Section 2(L) explicitly tie a pilot’s seniority only to his or her employment with
American. This is consistent with language elsewhere in the New CBA. For example, Section
13(A) provides that “seniority as a pilot shall be based upon the length of service as a flight deck
operating crew member with the Company . . . .” New CBA, Section 13(A) (emphasis added);
see also New CBA, Section 2(MM) (defining “Service” as “the period of time assigned to active
duty as a flight deck operating crewmember or supervisor with the Company.”) (emphasis
added).
Moreover, the Plaintiffs’ reliance on alleged general practices fails as a matter of law. It
is true that “collective-bargaining agreements may include implied, as well as express, terms. . . .
Furthermore, it is well established that the parties’ practice, usage and custom is of significance
in interpreting their agreement.” Conrail v. Railway Labor Executives’ Ass’n, 491 U.S. 299, 311
(1989) (internal citations and quotations omitted). But the Plaintiffs here advocate using such
alleged practices to negate the express and unambiguous language of the New CBA and LOA
12-05.8 This is contrary to well-established law for interpreting labor agreements, where
8 The Plaintiffs also note that as a result of the Section 1113 proceedings in American’s bankruptcy case,
“the Old CBA and its supplements (including Supplement CC) were null and void as of September 5, 2012.” To the
extent that the Plaintiffs rely on prior practices that existed under the Old CBA, these arguably would be irrelevant
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 11 of 19

12
“traditional rules of contractual interpretation are applied so long as their application is
consistent with federal labor policies.” NYS v. UPS, 198 F. Supp. 2d 188, 196 (N.D.N.Y. 2002)
(quoting Int’l Org. of Masters, Mates & Pilots v. Victory Carriers, Inc., 1985 U.S. Dist. LEXIS
20563, at *6 (S.D.N.Y. Apr. 19, 1985)). “Thus, if the agreement is unambiguous, the court is not
free to consider the practice, usage and custom applicable to such agreements.”9 UPS, 198 F.
Supp. 2d at 196–97 (citing Victory Carriers, 1985 U.S. Dist. LEXIS at *7–8 (“The Union argues
that the language of the duration clause should be construed in light of industrial practice, usage
and custom pertaining to all such agreements . . . However if the language of the contract is
unambiguous the court is not free to look to such factors and summary judgment is
appropriate.”); Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989)).10
when that CBA was abrogated and subsequently replaced by the specific seniority language in the New CBA, which
includes LOA 12-05.
9 The Plaintiffs’ argument regarding American’s alleged practices also appears to be inconsistent with the
Plaintiffs’ litigation position. Specifically, the Plaintiffs state that they were not properly credited for their TWA
seniority under Supplement CC and the TWA pilots’ integration into American’s seniority list. See Compl. ¶¶ 11-
12. Thus, the Plaintiffs sue here to seek seniority rights consistent with their date of hire at TWA, a system which
would give them better seniority than they currently possess. It is hard to see why the Plaintiffs would seek such
relief if, in fact, American already provided the Plaintiffs with seniority consistent with their date of hire at TWA.
10 Putting aside the merits of the contract claim, there are serious questions about the Plaintiffs' ability to
pursue this claim in federal court in the first instance. The Railway Labor Act, 45 U.S.C. § 151, et seq. imposes a
system of arbitration before the Board of Adjustment for minor disputes, which are disputes that involve the
interpretation or application of collective bargaining agreements. See 45 U.S.C. §§ 184, 153 First (i); Addington v.
US Airline Pilots Ass’n, 588 F. Supp. 2d 1051, 1063 (D. Ariz. 2008). The Board of Adjustment provides the
exclusive remedy in minor disputes. See Addington, 588 F. Supp. 2d at 103 (citing Consol. Rail Corp. v. Railway
Labor Execs. Ass’n, 491 U.S. 299, 310 (1989)). When arbitration is mandatory, an employee must at least attempt
to exhaust the contractual and administrative remedies before seeking judicial review of his claim. Atkins v.
Louisville & N.R. Co., 819, F.2d 644, 649 (6th Cir. 1987) (citing Republic Steel Corp. v. Maddox, 379 U.S. 650
(1965)). This requirement may be excused only if exhaustion would be futile. See id.; see also Addington, 588 F.
Supp. 2d at 1063. The Plaintiffs here concede that their breach of contract claim is a minor dispute but invoke the
futility exception, claiming that arbitration by a four or five member board would be “rigged” with two
representatives selected by American and two by the APA. Compl. ¶ 45. But the fact that a board is composed of
union and company representatives does not by itself render exhaustion futile as a matter of law. Addington, 588 F.
Supp. 2d at 1063–64 (citing United Farm Workers of Am., AFL-CIO v. Ariz. Agric. Employment Relations Bd., 727
F.2d 1475, 1478–80 (9th Cir. 1984) (en banc); Haney v. Chesapeake & Ohio R.R., 498 F.2d 987, 992 (D.C. Cir.
1974)). Nor does the use of a single neutral arbitrator such as Richard Bloch. See Addington, 588 F. Supp. 2d at
1064. Indeed, the fact that the board is likely to rule against the plaintiff on the merits does not necessarily make the
process futile. See id. (citing Everett v. USAir Grp., 927 F. Supp. 478, 485 (D. D.C. 1996), aff’d, 194 F.3d 173
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 12 of 19

13
B. Plaintiffs’ Second Claim Fails to the Extent it is a Hybrid Claim
In Count II of the Complaint, the Plaintiffs challenge their existing seniority by claiming
that it is a result of the APA’s breach of its duty of fair representation to former TWA pilots now
at American. Plaintiffs claim the APA breached its duty to them by:
(A) Agreeing to a System Seniority List which violates the terms of the
New CBA, to the severe detriment of its former TWA members;
(B) Agreeing to a System Seniority List that mirrors the prior list created
under Supplement CC and acknowledged by the APA in 2001 to be
unfair to the former TWA pilots; and
(C) Agreeing to a System Seniority List that treats the former TWA pilots
differently (and worse) than the pilots of other airlines acquired by
American.
Compl. ¶ 49.
A labor union’s duty of fair representation has three distinct aspects: “the exclusive
agent’s statutory authority to represent all members of a designated unit includes a statutory
obligation to serve the interests of all members without hostility or discrimination toward any, to
exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct.”
Vaca v. Sipes, 386 U.S. 171, 177 (1967). The duty of fair representation applies to all union
activity, including contract negotiation. Air Line Pilots Ass’n v. O’Neil, 499 U.S. 65, 67 (1991).
A union’s duty of fair representation extends to the negotiation of seniority rights for
union members. “In general, a union owes a duty of fair representation to all members of the
bargaining unit in negotiating an integrated seniority list.” Bernard v. Air Line Pilots Ass’n
Intern., AFL-CIO, 873 F.2d 213, 216 (9th Cir. 1989) (citing Humphrey v. Moore, 375 U.S. 335
(D.C. Cir.); Atkins, 819 F.2d at 649–50 (6th Cir. 1987)). But despite the Court's concerns about this issue, the Court
does not need to rule on the question of futility given its conclusion that Plaintiffs have not stated a claim for breach
of contract.
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 13 of 19

14
(1964)). “While a union may make seniority decisions within a wide range of reasonableness in
serving the interests of the unit it represents, such decisions may not be made solely for the
benefit of a stronger, more politically favored group over a minority group.” Barton Brands Ltd.
v. NLRB, 529 F.2d 793, 798–99 (7th Cir. 1976). “An essential element, then, necessary to raise a
limitation upon a union’s discretion in bargaining with respect to seniority rights is a bad faith
motive, an intent to hostilely discriminate against a portion of the union’s membership.”
Hardcastle v. Western Greyhound Lines, 303 F.2d 182, 185 (9th Cir. 1962).
To state a breach of duty claim, the plaintiff must plausibly allege that the union’s
wrongful conduct caused his injury. Vaughn v. Air Line Pilots Ass’n, Int’l, 604 F.3d 703, 709
(2d Cir. 2010) (citations omitted). In other words, a plaintiff must demonstrate that he actually
suffered an injury as a result of the union’s alleged misconduct. Sim v. New York Mailers’ Union
Number 6, 166 F.3d 465, 472 (2d Cir. 1999) (“[I]n addition to proving that the Union acted
arbitrarily and in bad faith, plaintiffs must demonstrate that any alleged misconduct had an effect
on the outcome . . . .”); see Phillips v. Lenox Hill Hosp., 673 F. Supp. 1207, 1214 (S.D.N.Y.
1987) (failing to take action that imposed no prejudice on plaintiff does not satisfy the causation
test).
“Although formally comprised of two separate causes of action, a suit in which an
employee alleges that an employer has breached a [collective bargaining agreement] and that a
union has breached its duty of fair representation by failing to enforce the [collective bargaining
agreement] is known as a ‘hybrid . . . claim.’” Acosta v. Potter, 410 F. Supp. 2d 298, 308
(S.D.N.Y. 2006) (quoting DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 164–65 (1983)).
To establish a hybrid claim, therefore, a plaintiff is required to prove both “(1) that the employer
breached a collective bargaining agreement and (2) that the union breached its duty of fair
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 14 of 19

15
representation vis-à-vis the union members. The plaintiff may sue the union or the employer, or
both, but must allege violations on the part of both.” White v. White Rose Food, 237 F.3d 174,
178–79 (2d Cir. 2001). Given the Court’s conclusions regarding the breach of contract claim
against American, the Plaintiffs’ “hybrid” claim in paragraph 49(A) of the Complaint must also
fail. See Acosta, 410 F. Supp. 2d at 309 (“[I]n a hybrid claim, if the employer is not liable to the
employee, neither is the union.”) (citing DelCostello, 462 U.S. at 165); see also Herr v. Cineplex
Odeon Corp., 1994 U.S. Dist. LEXIS 2539, at *12 (S.D.N.Y. Mar. 4, 1994).
This does not, however, dispose of the Plaintiffs’ remaining two theories of liability for
breach of the duty of fair representation against the APA in paragraphs 49(B) and (C) of the
Complaint. The Plaintiffs there claim that the APA breached its duty of fair representation in (1)
agreeing to a seniority list that mirrored the list under Supplement CC, and (2) agreeing to a
seniority list that treats the former TWA pilots differently from others. These claims are not
based on an alleged breach of the New CBA. Rather, the premise of these claims is that the
seniority agreed to by the APA is unfair to the former TWA pilots. See Compl. ¶¶ 10–13, 43–46.
While not expressly set forth in the Complaint, it appears that the Plaintiffs argue that the APA
should not have agreed to use the old seniority list for former TWA pilots once the Old CBA was
abrogated because the old seniority list was unfair once the corresponding job protections in
Supplement CC had been eliminated. See Compl. ¶ 17 (all pilots at-will employees once Old
CBA terminated). Drawing all reasonable inferences in favor of the Plaintiffs, therefore, the
Court finds that the two remaining claims under Count II are distinct from the contract claim and
survive independently.
The APA’s only theory for dismissal of these two claims relies upon arguments made in a
related case brought by the same Plaintiffs, Krakowski v. American Airlines, Inc., et al., Adv.
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 15 of 19

16
Proceeding No. 13-01283 (“Krakowski I”). See APA MTD at 14–15. The APA argues without
elaboration that the Plaintiffs’ claims are precluded for the same reasons they seek dismissal of
the complaint in Krakowski I. See Krakowski I APA MTD and Reply [Adv. No. 13-01283, ECF
Nos. 14-1, 25]. But while similar, the facts and arguments in Krakowski I are distinct from those
in this case. Krakowski I focuses on two things: (1) the arbitration regarding the substitute job
protections that should be given to former TWA pilots to replace those lost when Supplement
CC was terminated; and (2) the agreement between the APA and American that the arbitrator’s
remedy in that proceeding could not include any change in the seniority of these former TWA
pilots. The Complaint in this case cites neither of these events. Indeed, it appears to be carefully
crafted to avoid any mention of either, even though the events in the two cases are obviously
related. In any event, Krakowski I is distinct from the Plaintiffs’ claim here that the APA
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.11
C. Plaintiff’s Third Count of the Complaint Fails to the Extent that it Relies Upon
Breach of Contract
In Count III of the Complaint, the Plaintiffs allege that the “APA’s agreement with
American to implement a System Seniority List—one which does not follow the formula
described in the New CBA, to the detriment of the former TWA Pilot [sic]—is discriminatory
and arbitrary on its face.” Compl. ¶ 52 (emphasis added). The Plaintiffs also state that
“American colluded with [the] APA in its breach of its duty of representation in order to secure
11 The Court notes that the Defendants have disputed the merits of these additional allegations against the
APA. See Rakestraw v. Ari Line Pilots Ass’n, 981 F.2d 1524, 1536 (7th Cir. 1992) (“Employers are free to prefer
one group of employees over another. . . .”); Krakowski v. American Airlines, Inc. (In re AMR Corp.), 2014 Bankr.
LEXIS 2610, at *14 (Bankr. S.D.N.Y. June 3, 2014) (“[S]eniority is a zero sum game . . . if someone’s bumped up,
someone else goes down.”). It is premature, however, for the Court to rule on those issues where there is not an
adequate factual record or briefing.
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 16 of 19

17
[the] APA’s approval of the new CBA.” Compl. ¶ 53. The Court has already ruled that the
implementation of the System Seniority List does not constitute a breach of the New CBA.
Therefore, to the extent that Count III relies upon this premise, it is dismissed for the reasons set
forth above.
The Plaintiffs’ remaining allegations with respect to Count III are insufficient to establish
a claim. These allegations are the Plaintiffs’ conclusory statements that American colluded with
the APA in its breach of representation to secure the APA’s approval of the New CBA, Compl. ¶
53, and that American and the APA entered into a facially discriminatory and arbitrary
agreement and colluded with one another, Compl. ¶ 54. It is true that when deciding a motion to
dismiss, a court must proceed “on the assumption that all the allegations in the complaint are
true,” Twombly, 550 U.S. at 555, and must draw all reasonable inferences in favor of the non-
moving party. Ganino, 228 F.3d at 161. But “[t]he same deference does not extend, however, to
pleaded legal conclusions.” Johnson v. Priceline.com, Inc., 711 F.3d 271, 275 (2d Cir. 2013)
(citing Iqbal, 556 U.S. at 678).
Citing Steffens v. Brotherhood of Ry., Airline and S.S. Clerks, Freight Handlers, Exp. &
Station Employees, 797 F.2d 442, 445 (7th Cir. 1986), the Plaintiffs allege that the pleading
burden in these circumstances is not high. But in Steffens, the court stated that “[t]he complaint
alleges facts which, if true, would support a finding that the union had breached its duty of fair
representation and that the union and employer had colluded to deprive plaintiffs of their rights
under the collective bargaining agreement. . . . This is enough to state a claim for a hybrid duty
of fair representation suit.” Id. But the Plaintiffs do not do this here. The Complaint simply
makes statements amounting to the legal conclusion that American colluded with the APA to
gain the APA’s approval of the New CBA and that the Defendants “entered into a facially
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 17 of 19

18
discriminatory and arbitrary agreement.” These legal conclusions are not supported or tied to
facts in the Complaint. So “[w]hile an employer may be jointly and severally liable for a unions’
breach of its fiduciary obligations to its members, such liability can only exist where the facts
permit a rational inference that the employer has colluded with, and participated in the union’s
breach.” Kozera v. Int’l Broth. of Elec. Workers AFL-CIO, 892 F. Supp. 536, 545 (S.D.N.Y.
1995); see Lewis v. Tuscan Dairy Farms, Inc., 25 F.3d 1138, 1146 (2d Cir. 1994). The Plaintiffs
are free to make such allegations in an amended complaint. See Van Buskirk v. N.Y. Times Co.,
325 F.3d 87, 91 (2d Cir. 2003) (“[A] court granting a 12(b)(6) motion should consider a
dismissal without prejudice when a liberal reading of the complaint gives any indication that a
valid claim might be stated.”) (internal citations and quotations omitted).
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 18 of 19

19
CONCLUSION
For the reasons stated above, the Court grants the Defendants’ Motions in part and
dismisses Count I of the Complaint. The Court also dismisses the hybrid claim contained in
Count II of the complaint to the extent such claim is based upon an alleged breach of the New
CBA. Finally, the Court dismisses Count III of the Complaint. 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.
Dated: New York, New York
September 22, 2015
/s/ Sean H. Lane
UNITED STATES BANKRUPTCY JUDGE
14-01920-shl Doc 25 Filed 09/22/15 Entered 09/22/15 09:25:29 Main Document
Pg 19 of 19