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11/16/72 Frank E. Fitzsimmons Et Al v. American Airlines

November 16, 1972




Before McGOWAN and ROBB, Circuit Judges, and WYZANSKI, JR.,* United States Senior District Judge, District of Massachusetts.



PER CURIAM: This cause came on to be heard on the record on appeal from the United States District Court for the District of Columbia and briefs were filed by the parties. On consideration of the foregoing, it is

Ordered and Adjudged by this Court that this case is hereby dismissed for the reasons set forth in the attached memorandum.


Trans Caribbean Airways entered into a merger agreement with appellant American Airlines, Inc. Appellee Teamsters, the collective bargaining representative of several groups of TCA employees, thereupon instituted a grievance proceeding before the TCA System Board of Adjustment, alleging that the proposed merger would breach existing collective bargaining agreements with TCA. The relevant provisions of those agreements provided that, in the event of a transfer of ownership or control of TCA, TCA was to give notice of this survival agreement to any proposed successor and to arrange that the successor would assume these obligations in the merger agreement; if TCA were to default in this respect, it would become liable for all damages sustained by Teamsters and TCA employees.

The System Board found that, by entering into the merger agreement which made no provision for the assumption of the bargaining agreements by American, TCA had violated the bargaining agreements as so interpreted by the System Board, rendering TCA ultimately accountable for any resulting damages if and when the merger was consummated. The Board ordered TCA not to deliver its stock to American until TCA had posted a bond to cover any such damages. After unsuccessfully seeking voluntary compliance with the order to post bond, the Teamsters instituted this action against TCA under the Railway Labor Act, 45 U.S.C. § 159, to enforce the grievance award, and brought on a motion for preliminary injunctive relief which, if granted, would have blocked consummation of the merger of TCA into American upon its approval by the Civil Aeronautics Board.

In the District Court the parties appear to have assumed that the System Board's interpretation of the bargaining agreements was conclusive. What was urged by the air carriers (American having appeared in the proceeding) was that the award was invalid and unenforceable because it was in conflict with (1) the certification requirements and procedures of the Railway Labor Act and (2) the provisions of the Federal Aviation Act empowering the Civil Aeronautics Board to impose labor conditions in its order approving the merger. The Teamsters recognized that these were challenges to enforceability appropriate for judicial resolution, and the parties contemplated that they would be resolved in the instant proceeding.

The immediate interest of the carriers, however, was to work out some arrangement whereby the Teamsters would withdraw its request for injunctive relief, thereby enabling the merger to go forward. Discussions to this end produced an agreement, acceptable to the System Board, whereby American would be permitted to substitute its corporate undertaking for the bond required of TCA. This was done, and it was the expectation of the parties that the court would then address itself to the merits of TCA's prayer for a declaration that the award was valid and enforceable. Cross-motions for summary judgment were filed. The District Court, however, appears to have been of the view that the action before it was of a special statutory character directed only to the enforcement of the award, and that that action appeared to have become moot since the System Board's requirement of a bond had been fulfilled. After hearing arguments on the merits issues, in the course of which it repeatedly alluded to the possibility of mootness, the District Court ultimately entered an order denying both motions for summary judgment and dismissing the cause as moot.

In the stipulated agreement for substitution of American's corporate undertaking for the bond of TCA, the parties had recognized, however, the possibility that this holding of mootness might ensue; and, in order to preserve American's opportunity to press to a judicial decision its claims with respect to the invalidity and unenforceability of the award, it was agreed that American might bring an action to this end within 90 days after a dismissal of the instant suit. American did in fact file such a suit, and it is now pending in the District Court. American Airlines, Inc. v. Fitzsimmons , Civil Action No. 1072-71 .

American represents to this court that it would have taken no appeal from the order before us but for the fact that, in a memorandum opinion accompanying the order of dismissal, the District Court made certain statements which the Teamsters are now asserting to be res judicata of the merits of the pending suit.

In our view, the District Court's opinion does not address these merits issues, and the record indicates that the District Judge considered counsel's arguments on these points to be unnecessary for the proper resolution of the enforcement proceeding. The court's statement that the order was "conclusive on the parties" is a recitation of the language of the Railway Labor Act, 45 U.S.C. § 159, relevant to the usual questions of contract interpretation committed by Congress solely to the Board. Similarly, the conclusion that the award was a "valid determination of matters within the Board's jurisdiction" is properly construed as dealing only with the interpretation of the contract provisions. Read in the light of the court's statements in the record indicating that it believed that the broader enforceability arguments might require a different type of action, and that it was dealing only with the ordinary statutory enforcement suit, its comments in the memorandum opinion do not impress us as adjudicating anything with respect to the merits issues involving the validity and enforceability of the award.

American will, thus, not be deprived of a judicial determination of the contentions it makes. Its suit to this end is currently pending, and this court's reading of the District Court's opinion precludes invocation of that court's opinion as res judicata . Under these ...

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