Opinion
Civil Action No. 3:99-CV-0480-P.
September 26, 2000.
MEMORANDUM OPINION AND ORDER
Now before the Court for consideration are:
(1) The Findings and Recommendation of the United States Magistrate Judge filed November 15, 1999;
(2) Plaintiff's Response to Magistrate's Ruling Regarding Defendants' Motion to Dismiss filed December 6, 1999;
(3) APA Defendants' Opposition to Plaintiffs' Objections filed December 16, 1999;
(4) APA Defendants' Objections to the Findings and Recommendation of the United States Magistrate Judge filed December 6, 1999;
(5) Plaintiffs' Response to Allied Pilots Association Defendants' Objections to Magistrate's Recommendation filed January 7, 2000;
(6) APA Defendants' Reply in Further Support of their Objections filed January 25, 2000;
(7) Motion of the Texas AFL-CIO State Council for Leave to File Amicus Brief in Support of Objections of Allied Pilots Association to Magistrate Judge's Findings and Recommendation filed December 6, 1999; and
(8) Motion of Air Line Pilots Association, International for Leave to File Amicus Brief in Support of Objections of Allied Pilots Association to Magistrate Judge's Findings and Recommendation filed December 6, 1999.
After reviewing all of the above materials along with the relevant law, the Court hereby GRANTS the Motions for Leave to File Amicus Briefs, SUSTAINS the APA Defendants' objection to the Recommendation of the Magistrate as to preemption of the civil conspiracy claim by the RLA, OVERRULES Defendants' remaining objections, OVERRULES the Plaintiffs' Objections to the Recommendation of the Magistrate, and MODIFIES the Recommendation of the Magistrate Judge as specified herein.
Pursuant to L.R. 7.2(b), both the AFL-CIO and the Air Line Pilots Association, International demonstrated sufficient interest in the outcome of the litigation to warrant leave to file the amicus briefs
FACTS
The facts giving rise to this case have been thoroughly discussed in the parties' motions, the Magistrate's Recommendation, and in American Airlines, Inc. v. Allied Air Pilots Assoc., 53 F. Supp.2d 909 (N.D.Tex. 1999). Therefore, the Court will give only a brief recitation of the facts.
Allied Pilots Association ("the APA" or "the Defendants") is the exclusive bargaining agent for more than 9,000 pilots of American Airlines, Inc. ("American"). ( See Pls' Am. Compl. ¶¶ 2 07, 4.02). In 1998, a dispute arose over terms of the current collective bargaining agreement ("the CBA") between the APA and American. See American Airlines, 53 F. Supp.2d at 914. The dispute culminated in a staged sick-out by the pilot members of the APA. Id. at 915. The sick-out began on February 6, 1999, and continued until February 9, 1999, resulting in the cancellation of more than 1600 American flights due to lack of crew. Id. On February 10, 1999, American applied for and received a temporary restraining order, ("the TRO"), from Judge Kendall of the Northern District of Texas. The TRO prohibited the union or its officers from "calling, permitting, instigating, authorizing, encouraging, participating in, approving or continuing any interference with American's airline operations, including but not limited to any strike, work stoppage, sick-out, slowdown or other concerted refusals to fly over a minor dispute or otherwise in violation of the RLA, 45 U.S.C. § 151-188 (1988)." See American Airlines, 53 F. Supp.2d at 918 (quoting language from the TRO).
Parties stipulated and agreed, and the court found, that the dispute leading up to the sick-out and the TRO was a "minor dispute" under the RLA. See Stipulation filed by the parties on April 28, 1999, cited with authority, American Airlines, 53 F. Supp.2d at 938 n. 177; Findings of Fact and Conclusions of Law filed February 13, 1999, at 1, cited with authority, American Airlines, 53 F. Supp.2d at 938 n. 178. As discussed infra, because this was a minor dispute, the RLA prohibited the APA from engaging in a job action or self-help. See Consolidated Rail Corp. ("Conrail") v. Railway Labor Executives' Assoc., 491 U.S. 299, 303-04 (1989) (stating that the RLA permits the resort to self-help only when a "major dispute" is at issue).
The day after Judge Kendall ordered an end to the APA's staged sick-out, the number of canceled flights actually increased, so that on February 11, 1999, American canceled approximately 1200 flights. See American Airlines, 53 F. Supp.2d at 915. On February 12, 1999, Judge Kendall held a hearing on American's motion to hold the APA in contempt for violating the terms of the TRO. At the conclusion of the hearing, Judge Kendall adjudged the Defendants to be in civil contempt of court and ordered the APA to place $10,000,000 into the Registry of the Court pending resolution of the amount necessary to reimburse American the amount of money lost because of the APA's contumacious acts. See American Airlines, 53 F. Supp.2d at 916. After reviewing additional evidence, the court issued its findings of facts and conclusions of law, which resulted in a civil contempt finding of more than $45,000,000 damages due to American by the APA. See American Airlines, 53 F. Supp.2d at 937.
The Plaintiffs allege that American canceled over 2,200 scheduled flights between February 10, 1999 and February 17, 1999 "as a direct, intended, and foreseeable result of the Defendants' acts in furtherance of the Sick-Out." (Pls' Am. Compl. ¶ 4.21).
The case currently before this Court is a class action to recover economic damages suffered by passengers as a result of the APA's illegal sick-out. Plaintiffs represent ticketed passengers whose flights were either delayed or canceled as a result of the sick-out. They assert claims under: (1) the Railway Labor Act ("RLA"), 45 U.S.C. § 151-188 (1986); (2) the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961-1968 (1984); and (3) state common law theories of civil conspiracy, negligence per se, and tortious interference with contract. Defendants filed a motion to dismiss the action under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The matter was referred to United States Magistrate Judge Kaplan for Findings and Recommendation, which was issued on November 15, 1999. Magistrate Judge Kaplan recommended a dismissal of Plaintiffs' federal claims finding that the RLA does not permit a private cause of action for monetary damages and that Plaintiffs failed to satisfy the elements of a RICO claim. ( See Findings and Recommendation at 8, 10). He also recommended dismissing Plaintiffs' claim for negligence per se after finding that claim requires an interpretation of the CBA and is therefore preempted by the RLA. ( See Findings and Recommendation at 12-13).
In addressing the remaining state law claims of tortious interference with contract and civil conspiracy, Magistrate Kaplan divided the Plaintiffs into two sub-classes: those whose claims rested on acts occurring prior to the issuance of the TRO and those whose claims rested on acts occurring after the issuance of the back to work order. After analyzing the preemption arguments, he then found that the former group's claims should be preempted by the RLA while the latter group's claims should not be preempted. ( See Findings and Recommendation at 11-12). Finally, Magistrate Kaplan recommended that this Court decline supplemental jurisdiction over the surviving state law claims and dismiss them without prejudice so that Plaintiffs could institute their claims in state court. Id. at 18. Both parties filed objections to the Findings and Recommendations.
STANDARD
Pursuant to 28 U.S.C. § 636 (b), this Court will make a de novo determination of those specified proposed findings and recommendations to which the parties make an objection. However, the Court need not consider frivolous, conclusory or general objections. See DFW Vending, Inc. v. Jefferson County, Tex., 991 F. Supp. 578, 583 (E.D.Tex. 1998) (stating that a blanket objection fails the specificity requirement of Fed.R.Civ.P. 72(b) and 28 U.S.C. § 636).
I. Defendants' Objections
Defendants advance four separate arguments in objecting to the Magistrate's finding that some of Plaintiffs' state law claims should not be dismissed with prejudice: (1) that federal labor law preempts and precludes state law remedies for damages resulting from a peaceful labor dispute; (2) that federal labor law preempts all of Plaintiffs' state law claims because their resolution depends upon an interpretation of the CBA; (3) that federal law precludes actions by non-parties for breach of a federal court order; and (4) that the Airline Deregulation Act of 1978 ("ADA"), Pub.L. No. 95-504, 92 Stat. 1705 (codified as amended in scattered sections of 49 U.S.C.), preempts all of the state law claims. After reviewing Defendants' Objections, the amicus curiae briefs, and Plaintiffs' Response, the Court must agree with Defendants except as to the tortious interference with contract claim arising after the TRO was issued.
The APA specifically cites 49 U.S.C. § 41713 (b)(1) to support the preemption theory, which reads as follows: "[A] State . . . may not enact or enforce a law, regulation, or provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart."
A. The RLA and the Nature of the Sick-Out
Congress enacted the Railway Labor Act of 1926 in order "to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes." Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252 (1994). In furtherance of that goal, the RLA provides a mechanism of mandatory arbitration for the "prompt and orderly settlement" of disputes. 45 U.S.C. § 151a. "Major" disputes concern "rates of pay, rules or working conditions," id., and relate to "the formation of collective [bargaining] agreements or efforts to secure them." Consolidated Rail Corp. (Conrail) v. Railway Labor Executives' Assoc., 491 U.S. 299, 302 (1989). "Minor" disputes "gro[w] out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions," 45 U.S.C. § 151a, and thus involve "controversies over the meaning of an existing collective bargaining agreement in a particular fact situation." Trainmen v. Chicago R. I.R. Co., 353 U.S. 30, 33 (1957). "The distinguishing feature of [a minor dispute] is that the dispute may be conclusively resolved by interpreting the existing [CBA]." Conrail, 491 U.S. at 305. The courts recognized parties could face risks when categorizing disputes as major and minor. Therefore, the Supreme Court established a rule that disputes shall be classified as "minor" if a party's actions can be "arguably justified" by the terms of an existing CBA. Conrail, 491 U.S. at 306.
During the initial proceedings before Judge Kendall, American and the APA stipulated that the dispute between the parties was a minor dispute under the terms of the RLA. See American Airlines, 53 F. Supp.2d at 917. Moreover, in issuing the TRO, Judge Kendall ruled that the dispute was a minor dispute. See id. at 917 n. 178. This determination was very important when considering the issuance of the TRO because under the RLA, unions retain no right to strike over a minor dispute. See Conrail, 491 U.S. at 305. Because the RLA prohibited the APA from striking over this minor dispute, Judge Kendall found that the sick-out was an illegal job action. See American Airlines, 53 F. Supp.2d at 917.
B. Lingle/Norris Preemption
The RLA preempts any state law claim where the resolution of that claim depends upon the interpretation of the CBA. See Hawaiian Airlines v. Norris, 512 U.S. 246, 262 (1994) (extending preemption of the LMRA as discussed in Lingle v. Norge Div. of Magic Chef Inc., 486 U.S. 399, 405-06 (1988) to the RLA). All disputes, however, do not result in preemption under the RLA. "Purely factual questions" about the conduct of an employer or employee do not require the court to interpret a CBA and are therefore not preempted by the RLA. See Hawaiian Airlines, 512 U.S. at 261. Under this analysis, substantive protections provided by the state, independent of the existence of a collective bargaining agreement, are not preempted by the RLA. See Hirras v. National Railroad Passenger Corp., 44 F.3d 278, 282 (5th Cir. 1995). The Supreme Court provided three examples of these types of claims that the RLA does not preempt: (1) a state law prohibiting the termination of an employee for reasons against public policy, such as whistleblowing; (2) a state law requiring cabooses on all trains; and (3) a state law requiring a certain number of employees to handle a certain type of railroad equipment. See Hawaiian Airlines, 512 U.S. at 256-57. The Supreme Court similarly provided an example of a state claim which was preempted by the RLA. In that case, the employee sued the employer for wrongful discharge, but the only basis for claiming that he should not have been discharged was his allegation that the action violated the terms of the CBA. Id. at 257. Therefore, his claim did not exist independently of the CBA and was preempted by the RLA. Id. Even if the resolution of the CBA dispute and the state claim requires the consideration of the same set of facts, the state law claim will not be preempted so long as the claim is derived from a source independent of the collective bargaining agreement. Hirras, 44 F.3d at 282.
The APA contends that the RLA preempts Plaintiffs' state law claims for tortious interference with contract and civil conspiracy because the resolution of those claims requires an interpretation of the CBA. The Court addresses each claim in turn.
1. Tortious Interference with Contract
In order to make a claim for tortious interference, a plaintiff must prove: (1) the existence of a contract subject to interference; (2) willful and intentional interference with that contract; (3) the intentional interference was a proximate cause of plaintiff's damages; and (4) actual damage or loss occurred. See Victoria Bank Trust Co. v. Brady, 811 S.W.2d 931, 939 (Tex. 1991). As Magistrate Kaplan correctly stated, none of the elements of tortious interference requires the Court to interpret the CBA to resolve the claim. (See Findings and Recommendation at 11). Ascertaining each element demands only a purely factual inquiry. Specifically, the element of "willful and intentional interference" can be established without reference to the CBA.
Plaintiffs need not prove that the interference was illegal or unjustified in order to establish the elements of their claim. Yet conversely, Defendants assert that because they argue that their job action was justified and legal, preemption must result, even if the conflict is later judged to be a "minor dispute." Defendants contend that their proffered affirmative defense of justification demands an interpretation of the CBA to determine if the conflict was a "major dispute" that would justify Defendant's job action. This Court will assume arguendo that if such interpretation of the CBA were necessary, then Plaintiffs' claim would be preempted.
In the Findings and Recommendation, Magistrate Kaplan did not consider whether the Court would need to reference the CBA in resolving the APA's justification defense. ( See Findings and Recommendation at 11). However, this Court will assume without deciding that "[t]he claim is also preempted if [the defendant] seeks to defend its conduct on the ground that the conduct was justified by the CBA." Polich v. Burlington N., Inc., 942 F.2d 1467, 1470 (9th Cir. 1991).
Under Texas law, justification is a defense to a claim for tortious interference with contract. See Victoria Bank, 811 S.W.2d at 939. Justification may be shown if Defendants acted so as to protect or further their own legal rights or to protect a colorable legal right that equals or exceeds the rights of Plaintiffs. See Bennett v. Computer Assoc. Intern., Inc., 932 S.W.2d 197, 202 (Tex.App.-Amarillo 1996, writ denied) (citing Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 210 (Tex. 1996)). Defendants contend that "their actions were indeed justified because the dispute with American was arguably a `major' dispute under the RLA involving American's unilateral abrogation or alteration of the existing collective bargaining agreement." (APA Defendants' Objections at 14).
Defendants' argument fails with respect to post-TRO conduct because the issuance of the TRO precluded any justification defense premised upon the CBA. It is irrelevant to inquire whether Judge Kendall correctly interpreted the CBA in finding the conflict to constitute a "minor dispute," whether the TRO was therefore rightly or wrongly issued, or whether or not the sick-out was justified under the CBA. As the Plaintiffs argued, "[a]fter Judge Kendall's Back-To-Work Order, a judicial decree that the APA had no legal right to engage in or solicit the sick out, nothing in the CBA could even arguably justify the Defendants' conduct in maintaining the sick-out." (Pls' Response to APA's Obj. at 14). Judge Kendall's findings need not be consulted by this Court; once Judge Kendall issued the TRO, his order trumped any possible justification defense based upon the rights conferred by the CBA. Ordinarily, parties should always obey the court's orders, regardless of whether they think the orders are correct. See Maness v. Meyers, 419 U.S. 449, 458 (1975). The only appropriate remedy is to appeal the order, and absent a stay, the order must be complied with during appeal. Id. The terms of the CBA, a contract between labor and management, offer no legal justification for violating a court order under any interpretation. Since Defendants thus had no possible legal justification under the CBA, there is no need to interpret it. Therefore, because the elements of tortious interference with contract as well as the affirmative defense thus involve purely factual inquiries not requiring reference to the CBA, the claim is not preempted by the RLA. See Hawaiian Airlines, 512 U.S. at 261.
The same logic would nullify a justification defense for civil conspiracy based upon the CBA. The Court does not reach this issue because the civil conspiracy claim is dismissed on other grounds, infra.
It is important to note that Plaintiffs' claim does not rely upon establishing a violation of the TRO. As the discussion of the civil conspiracy claim makes clear, infra, third parties to a TRO may not base claims upon the violation of the TRO. Here, Plaintiffs can establish all of the elements of tortious interference regardless of the existence of the TRO. The TRO merely negates a possible affirmative defense that Defendants might wish to raise to justify their conduct. As Plaintiffs state:
as part of their common law action for tortious interference with contract, Plaintiffs merely premise their claims on Allied Pilots' conduct which just happens to have already been found contemptuous by Judge Kendall. Plaintiffs properly plead the undeniable fact that such conduct was specifically prohibited by Judge Kendall's Back-To-Work Order. Plaintiffs do not seek liability against the APA Defendants merely because Judge Kendall prohibited their conduct, but rather, Plaintiffs point to Allied Pilots' violation of the Back-To-Work Order as evidence, arguably conclusive, of the lack of justification for Allied Pilots' tortious conduct.
(Pls' Response to APA's Obj. at 14-15). Indeed, as for justification based upon the CBA, the existence of the TRO conclusively precludes such a defense.
2. Civil Conspiracy
A civil conspiracy is "a combination of two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means." Triplex Communications, Inc. v. Riley, 900 S.W.2d 716, 719 (Tex. 1995). Unlike the tortious interference claim, Plaintiffs cannot establish the elements of their civil conspiracy claim without relying upon the TRO or the CBA. Plaintiffs claim therefore fails.
By violating a court order, even one that is later set aside as incorrect, a party risks being held in civil or criminal contempt. See Maness v. Meyers, 419 U.S. 449, 458 (1975). Holding the offending party in either civil or criminal contempt is the remedy for the violation of a TRO. Id. The TRO may only be enforced by parties to the suit from which the order emanated. See Northside Realty Associates, Inc. v. United States, 605 F.2d 1348, 1356-57 (5th Cir. 1979). A non-party to the action may not receive civil contempt damages, nor may an individual institute an independent claim for civil contempt. See D. Patrick, Inc. v. Ford Motor Co., 8 F.3d 455, 459 (7th Cir. 1993). Furthermore, a TRO is not a final judgment for the purposes of collateral estoppel or res judicata. See Texas v. Wellington Resources Corp., 706 F.2d 533, 537 (5th Cir. 1983) ("Hearings on these nonpermanent injunctions do not serve the same purpose as a hearing on the merits; they only preserve the status quo awaiting resolution of the merits.").
The passengers who have brought suit could not have brought an action to enforce the back-to-work order. Nor can the passengers claim that the TRO conclusively proves that the APA's actions were illegal. Accordingly, Plaintiffs cannot rely upon the issuance of the TRO alone to demonstrate unlawfulness necessary to prove the civil conspiracy claim. Plaintiffs seem to recognize this limitation by arguing that their claims are not prefaced upon the violation of the TRO but that it merely demonstrates the wrongfulness of the APA's conduct. But Plaintiffs demonstrate no basis for claiming the illegality of the conduct other than the violation of the TRO, as any claim based upon the CBA would be preempted by the RLA. Since Plaintiffs have failed to satisfy the elements of the civil conspiracy claim, the claim is dismissed.
Plaintiffs' status as total strangers to the labor/management relationship and the relevant CBA does not require any different outcome. In fact, the NLRA has previously been held to preempt the claims of parties who were similarly situated as third parties to the CBA. See Rehmar v. Smith, 555 F.2d 1362, 1366 (5th Cir. 1977).
C. Garmon/Terminal Preemption
With all of the same concerns in mind for a single, federal regulatory scheme for labor law, the Supreme Court developed another form of preemption referred to as Garmon preemption. See San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959). The Garmon Court indicated a concern "with the potential conflict of two law-enforcing authorities, with the disharmonies inherent in two systems, one federal the other state, of inconsistent standards of substantive law and differing remedial schemes." Garmon, 359 U.S. at 242. The Supreme Court identified as the common theme of its cases its "regard to the fact that Congress has entrusted administration of the labor policy for the Nation to a centralized administrative agency, armed with its own procedures, and equipped with its specialized knowledge and cumulative experience." Id. at 242. Due to its concern with conflict "in the broadest sense," the judicial system began to focus on the nature of the activities which the states sought to regulate rather than the method of regulation imposed by the states. Id. at 243. "When the exercise of state power over a particular area of activity threatened interference with the clearly indicated policy of industrial relations, it has been judicially necessary to preclude the States from acting." Id. The Supreme Court went on to state that it does not matter "whether the States have acted through laws of general application rather than laws specifically directed towards the governance of industrial relations. Regardless of the mode adopted, to allow the States to control the conduct which is the subject of national regulation would create potential frustration of national purpose." Id. at 244. This does not remove all power from the states to regulate labor activities in some aspects. The Court clearly delineated two areas that would remain within the states' power of control: regulation of activity that is a merely peripheral concern of federal labor law and regulations where the activity touches an interest deeply rooted in local feeling and responsibility. Id. at 243-244.
Although Garmon addressed claims preempted by the NLRA, the Court has regularly referred to the NLRA for assistance in construing the RLA. See Brotherhood of Railroad Trainmen v. Jacksonville Terminal Co, 394 U.S. 369, 383 (1969).
While Garmon began as a case that focused on the primary jurisdiction of the National Labor Relations Board, see Jacksonville Terminal, 394 U.S. at 384 n. 19, it has come to stand for a more sweeping proposition. According to the Fifth Circuit, "[t]he fundamental precept of Garmon is that liability under a state cause of action is preempted whenever it poses a serious risk of conflict with national labor policy." Mobile Mechanical Contractors Ass'n, Inc. v. Carlough, 664 F.2d 481, 487 (5th Cir. 1981). In Carlough, the Fifth Circuit preempted the plaintiff's state law claims for damages resulting from an unlawful, but peaceful, strike. The Court reasoned, "[t]he basis of the association's state claims — and the activity from which its alleged damages flow — is not the union's demand . . . but the strike in support of that demand." Carlough, 664 F.2d at 487. In short, the focus has shifted from the labor board's arguable jurisdiction over the subject matter to a preference for a unified area of labor law that is relatively immune from external pressures exerted by the state.
In this same trend, the Supreme Court later ruled that states cannot make laws refusing to contract with employers who regularly violate labor laws because such a prohibition would "interfere with Congress' `integrated scheme of regulation' by adding a remedy to those already prescribed by the NLRA." Wisconsin Department of Industry v. Gould, 475 U.S. 282, 287 (1986). According to the Supreme Court, it does not "matter that a supplemental remedy is different in kind from those that may be ordered by the Board, for "judicial concern has necessarily focused on the nature of the activities which the States have sought to regulate, rather than on the method of regulation adopted." Id. at 287 (internal quotes omitted). The Fifth Circuit similarly recognized this principle in Carlough in stating that "to permit the association to supplement the [NLRB's] remedy with additional state damages runs counter to the teachings of Garmon." Carlough, 664 F.2d at 488 (finding that an award of damages can interfere with national policy just as preventative regulation can).
1. Pre-TRO Conduct
In the matter at hand, allowing plaintiffs' state law claims premised on pre-TRO conduct to proceed would directly and substantially interfere with federal regulation of the APA's strike. The relationship between management and labor exists in a delicate balance. "The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy." Garmon, 359 U.S. at 247. Allowing the state law tort claims to proceed under these circumstances, regardless of the legality of the strike, would place an incredible advantage in the hands of management. This principle has been regularly noted in cases involving strikes by public employees. In one case, a New York Court of Appeals wrote, "[a private action for damages] would be a powerful deterrent to public employee strikes, but it would also, as the claims for damages in the Burnes Jackson complaint, impose a crushing burden on the unions and each of the employees participating in the strike." Burns Jackson Miller Simms Spitzer v. Linder, 59 N.Y.2d 314, 329 (N.Y.Ct.App. 1983).
Other cases have also noted the power associated with awarding damages for illegal strikes by a union. One court expressed reluctance to allow employers and unions "to use the club of damages against each other." CSX Transportation Inc. v. Marquar, 980 F.2d 359, 379 (6th Cir. 1992). The potential advantage to management prompted the Fifth Circuit to explicitly refuse an employer's claim for damages against a union for losses incurred as the result of an illegal strike. See Burlington Northern R.R. Co. v. Brotherhood of Maintenance of Way Employees, 961 F.2d 86, 89 (5th Cir. 1992); Louisville and Nashville R.R. Co. v. Brown, 252 F.2d 149, 155 (5th Cir. 1958). The Fourth Circuit recently came to the same conclusion and refused an employer's claim for damages resulting from a union's illegal strike over a minor dispute. See Norfolk Southern Railway v. Brotherhood of Locomotive Engineers, 164 LRRM 2641 (4th Cir. 2000).
Regardless of whether the damages are sought by the employer or a third party, the imbalance to the bargaining process would be just as profound. As Magistrate Kaplan recognized, the award of damages for damages incurred in the "collective bargaining process would, in effect, give the employer a weapon with which to keep the unions and their agents "in line." The risk is no less when the party seeking damages is a stranger to the collective bargaining process, such as airline customers affected by an illegal work stoppage. Management would still be able to use the threat of large damage awards in potential class actions such as this one to keep the unions and their agents `in line.'" (Findings and Recommendation at 7) (quoting National Airlines, Inc. v. Airline Pilots Association International, 431 F. Supp. 53, 54 (S.D. Fla. 1976)).
All of the above cases dealt with claims brought under the RLA. However, that is not dispositive of the issue currently before the Court. Whether the threat of damages comes under the RLA or common law, the result would be the same. The best way to produce more unified results and allow the parties to focus their attention on resolving the labor dispute is to allow the federal courts and federal law sole jurisdiction to implement any remedy.
In looking to the nature of the union's actions, one must acknowledge that the sick-out was the APA's response to the dispute with American. Regardless of the legality of the strike, the union's actions and the ability to strike lie at the heart of labor law. In most cases, strikes by participants of major industrial companies will affect thousands and thousands of people who are not a party to the CBA. Due to the far-reaching consequences of any action taken by these players, such strikes as the APA's cannot be considered peripheral to the concerns of labor law. Moreover, there is no evidence that the strike used any threats or violence or concerned any other matter that is grounded in local control so as to avoid preemption.
2. Post-TRO Conduct
The Court is mindful that the same factors justifying preemption of pre-TRO conduct could arguably justify preemption of post-TRO conduct. Nevertheless, this Court finds that permitting liability to third parties for conduct occurring after issuance of a TRO will not meaningfully disrupt the balance between labor and management.
As discussed above, a TRO must be obeyed until set aside. Maness v. Meyers, 419 U.S. 449, 458 (1975). Thus, neither a union nor an employer may have any reasonable expectation or good-faith belief that its conduct in violation of the TRO is legal, let alone legally protected by federal labor policy. Those who violate a court order do so at their peril, and merit no federal license to continue engaging in conduct that violates the rights of third parties even after a judge has forbidden them to do so. Further, there is no ambiguity in a rule refusing to exempt post-TRO conduct from valid state laws not implicating a CBA. The clear bright line is crossed only when a party continues to act contrary to state law after a court has forbidden such conduct by issuing a restraining order or injunction. There can be no confusion that such conduct no longer enjoys special legal protection.
The Court notes that the APA did, in fact, pay for the consequences of violating the court order. As a result of the sick-out, Judge Kendall imposed a civil contempt fine of $45,000,000 against the APA. Yet this award does nothing to compensate third parties damaged by illegal conduct. Third parties are not foreclosed by federal labor policy from seeking compensation for damage they suffered when such claims will not disrupt that federal policy. Indeed, national labor policy is not disrupted by permitting post-TRO conduct to be subject to state law; there is no "potential frustration of national purpose." Cf. Garmon, 359 U.S. at 242. Parties do not forfeit any rights granted under a CBA or subject to federal management. They merely are not permitted to hide behind the shield of federal preemption doctrine for conduct in violation of state law. All conduct prior to a court order continues to be subject to federal preemption, as does all post-TRO conduct that implicates a CBA. Employers gain no new weapon in their arsenal with which to bludgeon potential strikers; unions will not be more hesitant to strike, for they incur potential liability to third parties only for conduct that takes place after a court order is issued.
Note again that enforcing the issuance of a TRO as the bright line between special legal protection and ordinary subjection to valid laws does not permit claims to be based upon the TRO itself. The TRO is instead a boundary; it marks the point at which the interest of national labor policy no longer outweighs the peculiarly local concerns of the courts enforcing state laws. Cf. Garmon, 359 U.S. at 243-244.
D. ADA Preemption
Defendants argue that Plaintiffs' common law causes of action are preempted by the Airline Deregulation Act of 1978 ("ADA"), Pub.L. No. 95-504, 92 Stat. 1705 (codified as amended in various sections of Title 49). This Court adopts the finding and recommendation of the magistrate to find no ADA preemption of Plaintiffs' claims.
E. Liability for Peaceful Labor Strike
This Court adopts the finding and recommendation of Magistrate Judge Kaplan to reject any defense that no common law claims can arise from a peaceful labor strike as inapplicable to this case.
F. Disposition of Remaining State Law Claim
This Court adopts the findings and recommendation of the magistrate to dismiss the surviving state law claim without prejudice. The interests of clarity, judicial economy, and the appropriateness of addressing state law claims in state courts all counsel against this Court attempting to disentangle surviving and dismissed claims, surviving and dismissed plaintiffs, and then remanding them to their separate originating state courts. This Court chooses not to exercise its supplemental jurisdiction in this case.
II. Plaintiffs' Objections
Plaintiffs made three objections to the Findings and Recommendation. The first two object to Magistrate Kaplan's recommendation to dismiss rather than remand Plaintiffs' surviving state law causes of action. Plaintiffs' objections are OVERRULED. The Court's ruling makes clear that the state law claim remaining after this Court's previous rulings is dismissed without prejudice.
Plaintiffs' third objection is titled a conditional objection and argues that in the event the Court sustains the Defendants' objections, Plaintiffs object to the portions of the Findings and Recommendation that dismiss Plaintiffs' claims under the RLA, RICO, and the claims against the individual Defendants. Plaintiffs give no specific reason for their objection and merely incorporate by reference the legal arguments set forth in their briefs and response to Defendants' Motion to Dismiss. This objection is precisely the type of blanket objection that the Court need not consider. See DFW Vending, Inc. v. Jefferson County, Tex., 991 F. Supp. 578, 583 (E.D.Tex. 1998). Accordingly, the Court OVERRULES Plaintiffs' Objections to the Findings and Recommendation.