Flight Options, LLC v. International Brotherhood of Teamsters, Local 1108 , 873 F.3d 540 ( 2017 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 17a0233p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FLIGHT OPTIONS, LLC; FLEXJET, LLC; ONESKY ┐
FLIGHT, LLC; FLIGHT OPTIONS HOLDING I, INC., │
Plaintiffs/Counter-Defendants-Appellants, │
│ No. 17-3188
>
v. │
│
│
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL │
1108; INTERNATIONAL BROTHERHOOD OF TEAMSTERS, │
AIRLINE DIVISION, │
Defendants/Counter-Claimants-Appellees. │
┘
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 1:16-cv-00732—James S. Gwin, District Judge.
Argued: October 5, 2017
Decided and Filed: October 16, 2017
Before: SUTTON, DONALD, and THAPAR, Circuit Judges.
_________________
COUNSEL
ARGUED: W. Chris Harrison, OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C.,
Memphis, Tennessee, for Appellants. James Petroff, BARKAN MEIZLISH, LLP, Columbus,
Ohio, for Appellees. ON BRIEF: W. Chris Harrison, Audrey M. Calkins, Zachary W. Hoyt,
OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C., Memphis, Tennessee, for
Appellants. James Petroff, Trent R. Taylor, BARKAN MEIZLISH, LLP, Columbus, Ohio,
Nicolas M. Manicone, Deirdre Hamilton, INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, Washington, D.C., for Appellees.
No. 17-3188 Flight Options, et al. v. Int’l Bhd. of Teamsters, Local 1108, et al. Page 2
_________________
OPINION
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THAPAR, Circuit Judge. Bad weather causes turbulence. As it turns out, so does
merging two luxury airlines. A few years ago, Flight Options announced that it would acquire
and merge operations with Flexjet. The airlines and their pilots’ union have been fighting ever
since—and have become frequent fliers in this circuit. This is the second time the parties have
been before us this year. Their first appeal was about how to combine the pilots’ seniority lists.
See Flight Options, LLC v. Int’l Bhd. of Teamsters, Local 1108, 863 F.3d 529 (2017). This
appeal is about how to integrate the pilots under one collective-bargaining agreement.
I.
The International Brotherhood of Teamsters has represented the Flight Options pilots for
over ten years. And when Flight Options and Flexjet announced a merger, the Flexjet pilots
elected the Teamsters to represent them too. Now the airlines and the union have to find a way
to fold the Flight Options and Flexjet pilots into one labor group.
Flight Options and the union already have a collective-bargaining agreement that says
what should happen in the event of a merger. Section 1.5(c)(4) requires the airlines and the
union to modify the agreement “in those respects necessary to permit the integration” of new
pilots. The parties have nine months to execute a modified agreement. If they reach an impasse,
Section 1.5(c)(4) mandates that they work it out in binding arbitration.
One snag: The existing collective-bargaining agreement also became “amendable” under
the Railway Labor Act shortly after the airlines merged. And after the agreement became
amendable, either party could propose broad changes affecting the pilots’ rates of pay and
working conditions. See 45 U.S.C. § 156. To do so, one party need only serve the other with
notice under Section 6 of the Act. Id. Once notice is served, the parties must hold their first
conference within thirty days. Id. Sure enough, the union served the airlines with notice just
before the parties began their Section 1.5(c)(4) negotiations.
No. 17-3188 Flight Options, et al. v. Int’l Bhd. of Teamsters, Local 1108, et al. Page 3
So the parties face two duties to bargain. And they disagree about how those duties
interact. The airlines maintain that the parties must resolve their Section 1.5(c)(4) negotiations
before turning to the union’s Section 6 proposals. But the union thinks that both negotiations
will address the same issues and should happen at the same time. Unsurprisingly, the parties’
mandatory bargaining conferences have been unproductive. The union presented broad Section
6 proposals, while the airlines focused on the narrower issues they deem necessary for
integration. The union eventually asked the district court for a preliminary injunction ordering
the airlines to bargain the union’s Section 6 proposals in good faith. The district court granted
the injunction, and the airlines appealed.
II.
Airlines and their unions must resolve their disputes consistent with the procedures in the
Railway Labor Act. Emswiler v. CSX Transp., Inc., 691 F.3d 782, 785 (6th Cir. 2012). The Act
provides two procedural tracks: one for major disputes and one for minor disputes. Consol. Rail
Corp. v. Ry. Labor Execs.’ Ass’n, 491 U.S. 299, 302–04 (1989).
Major disputes relate to the formation of a collective-bargaining agreement or the effort
to change the terms of a collective-bargaining agreement. Elgin, J. & E. Ry. Co. v. Burley, 325
U.S. 711, 723 (1945). In other words, a major dispute concerns “the acquisition of rights for the
future, not [the] assertion of rights claimed to have vested in the past.” Id. Parties to a major
dispute must try to resolve it through private negotiation, and if necessary, mediation. Wheeling
& Lake Erie Ry. Co. v. Bhd. of Locomotive Eng’rs & Trainmen, 789 F.3d 681, 690 (6th Cir.
2015). If both of those mechanisms fail, the parties must determine whether or not to proceed to
arbitration. Id. at 690–91. But until the parties exhaust these procedures, they may not alter the
status quo by implementing a contested change or striking. Id. at 691. If either party jumps the
gun, the other can ask a federal court to step in and issue an injunction. Id.
Minor disputes, on the other hand, arise from disagreements about how an existing
collective-bargaining agreement applies to a particular situation. Id. Again, the parties must first
attempt to negotiate privately. Id. But if negotiations over a minor dispute fail, the parties must
No. 17-3188 Flight Options, et al. v. Int’l Bhd. of Teamsters, Local 1108, et al. Page 4
proceed directly to binding arbitration. Id. The court plays no role in resolving minor disputes
unless a party asks it to review the arbitrator’s decision. See Emswiler, 691 F.3d at 785.
When a party claims a dispute is minor, it bears the burden of demonstrating that the
resolution of the dispute involves interpreting the existing collective-bargaining agreement.
Consol. Rail Corp., 491 U.S. at 305–07. To carry this burden, the moving party must
demonstrate that its action is “arguably justified” by the terms of the agreement. Id. at 306–07.
But this burden is “relatively light”—so long as the party’s proffered interpretation is not
“frivolous or obviously insubstantial,” the dispute is minor. Id. at 307.
The district court found that the dispute over the scope of Section 1.5(c)(4) negotiations
was minor and left the issue for arbitration. But it assumed that the dispute over the order of
negotiations was major. In the district court’s view, the airlines had a “distinct duty to
immediately engage in good faith bargaining under RLA Section 6” and could not “avoid
Section 6 bargaining simply because they want to prioritize the arguably narrower category of
Section 1.5(c)(4) issues.” Flight Options, LLC v. Int’l Bhd. of Teamsters, No. 1:16-CV-00732,
2017 WL 343346, at *9 (N.D. Ohio Jan. 24, 2017). On appeal, the airlines argue that the dispute
over the order of negotiations was minor and thus should have gone to arbitration. We review
the district court’s classification de novo. CSX Transp., Inc. v. United Transp. Union, 395 F.3d
365, 368 (6th Cir. 2005).
The district court assumed the parties’ dispute was major simply because the union
served a Section 6 notice. But that assumption was incorrect. A dispute can be minor even if it
affects the parties’ obligations under Section 6. See, e.g., id. The proper inquiry is whether the
existing collective-bargaining agreement “controls the controversy.” Elgin, 325 U.S. at 723.
So first, we consider whether the airlines claim they have a right under the existing
collective-bargaining agreement to prioritize Section 1.5(c)(4) negotiations. Consol. Rail Corp.,
491 U.S. at 305. They do. The airlines say the collective-bargaining agreement does not apply
to the Flexjet pilots until the parties complete Section 1.5(c)(4) negotiations. So, in their view,
negotiating the union’s Section 6 proposals, which involve rates of pay and work rules for both
the Flight Options and Flexjet pilots, would be premature. Instead, according to the airlines, the
No. 17-3188 Flight Options, et al. v. Int’l Bhd. of Teamsters, Local 1108, et al. Page 5
parties must wait until the Section 1.5(c)(4) negotiations fold the Flexjet pilots into the existing
contract terms and then use the modified agreement as a baseline for negotiating those broader
issues under Section 6. Thus the airlines claim that this dispute is minor, because it involves
interpreting the collective-bargaining agreement.
But it is not enough that the airlines claim their dispute is minor. There remains the
second question: whether their reading of the collective-bargaining agreement is arguably
justified. Id. at 306–07. It is. Section 1.5(c)(4) states that “[u]ntil such time as a fully merged
agreement is reached, either through bargaining or arbitration, the surviving air carrier may
continue to operate the two carriers separately.” That language arguably implies that the airlines
do not have to bargain over Section 6 proposals involving all the pilots of the combined airlines
until “such time as a fully merged agreement is reached.” The airlines’ argument is not
frivolous: It is consistent with the contract’s plain language. See Airline Prof’ls Ass’n, Teamster
Local Union 1224 v. ABX Air, Inc., 400 F.3d 411, 416–17 (6th Cir. 2005).
Our decision in CSX Transportation, Inc. is instructive on this point. There, a railroad
claimed that a moratorium provision in its collective-bargaining agreement allowed it to delay
bargaining under Section 6 for two years. 395 F.3d at 369. This court held the railroad’s claim
was arguably justified for two reasons: (1) the plain language of the agreement could be read to
indicate that the union’s Section 6 proposals should not progress, and (2) the union pointed to no
conflicting language to cast doubt on that interpretation. Id. at 369–70. That none of the union’s
arguments “rested on the contract language written by the parties” was significant. Id. at 370.
So too here. The union has failed to point to any language demonstrating that the Flexjet pilots
do not need to be integrated into the existing collective-bargaining agreement before that
agreement can be renegotiated under Section 6. Thus, given that the airlines’ claim is consistent
with the collective-bargaining agreement and the union has failed to point to any contradictory
language of its own, the dispute is minor and the preliminary injunction must be vacated.1
1
Because the preliminary injunction must be vacated under the Railway Labor Act, we need not address the
airlines’ argument that it also would have been barred under the Norris-LaGuardia Act.
No. 17-3188 Flight Options, et al. v. Int’l Bhd. of Teamsters, Local 1108, et al. Page 6
In so holding, however, we express no opinion as to whether the airlines’ argument will
carry the day in arbitration. Gen. Comm. of Adjustment, United Transp. Union, W. Md. Ry. Co.
v. CSX R.R. Corp., 893 F.2d 584, 592 (3d Cir. 1990) (explaining that finding a position to be
arguably justified “should not be taken to infer any judgment . . . on the merits” of the dispute);
see CSX Transp., Inc., 395 F.3d at 369 (noting that “[t]he facts . . . indicate that [the railroads’
interpretation] may not be strong, but it is arguably justified”). Whether the terms of the
collective-bargaining agreement do in fact allow the airlines to delay Section 6 negotiations must
be determined in arbitration.
III.
The airlines make two additional arguments. First, they ask that we strike any “advisory
opinions” included in the district court’s order. Second, they ask us to issue an advisory opinion
of our own. We decline both invitations.
A.
In its order, the district court characterized Flexjet as an “affiliate” of Flight Options and
Flexjet LLC as the “parent” company of Flexjet Ltd. The district court also made several
comments about the scope of Section 1.5(c)(4). The airlines argue that these are advisory
opinions that violate Article III of the Constitution.
Article III prohibits federal courts from issuing opinions that do not resolve “actual
controversies” or bring about change for the parties. Muskrat v. United States, 219 U.S. 346, 361
(1911); see Chi. & S. Air Lines v. Waterman S.S. Corp., 333 U.S. 103, 113–14 (1948). Such
opinions may arise where the parties are not adverse, the issue is moot, or the court cannot grant
relief. Princeton Univ. v. Schmid, 455 U.S. 100, 102 (1982) (per curiam); Hall v. Beals, 396
U.S. 45, 48 (1969) (per curiam); Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937). The
district court’s order is not an advisory opinion, and the airlines do not contend that it is. Instead,
the airlines assert that the district court made various statements that constitute mini-advisory
opinions. But the airlines have failed to provide any authority showing that it is this court’s role
to nitpick a district court’s order sentence-by-sentence. Our job is “to correct wrong judgments,
not to revise opinions.” Herb v. Pitcairn, 324 U.S. 117, 126 (1945). And to the extent the
No. 17-3188 Flight Options, et al. v. Int’l Bhd. of Teamsters, Local 1108, et al. Page 7
airlines worry about collateral estoppel with respect to Flexjet’s corporate structure, their
concerns are misplaced. The district court’s conclusion was not necessary to its judgment, and
thus cannot be used to preclude future litigation of that issue. See Allen v. McCurry, 449 U.S.
90, 94 (1980).
B.
Aside from modifying and renegotiating the collective-bargaining agreement, the parties
had been negotiating a “Voluntary Separation Program” for the pilots. It too has been the subject
of litigation. The district court held that the airlines had bargained in bad faith by failing to
memorialize an oral agreement that the parties reached regarding this program. The airlines ask
us to reverse that conclusion. But the parties have already settled this issue. It is thus moot.
Int’l Union, United Auto., Aerospace, Agr. & Implement Workers of Am. v. Dana Corp.,
697 F.2d 718, 721 (6th Cir. 1983) (“We cannot reach the merits of this appeal unless we find that
the parties’ Settlement Agreement did not render the case moot. Generally, the settlement of a
dispute between the parties does render the case moot.”).
IV.
For the reasons set forth above, we VACATE the district court’s preliminary injunction
ordering the airlines to bargain over the union’s Section 6 proposals, and REMAND for further
proceedings consistent with this opinion.