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Larsen v. American Airlines Inc.

UNITED STATES COURT OF APPEALS, SECOND CIRCUIT.


February 5, 1963

LAWRENCE W. LARSEN, PLAINTIFF-APPELLANT
v.
AMERICAN AIRLINES, INC., DEFENDANT-APPELLEE.

Author: Swan

Before SWAN, FRIENDLY and KAUFMAN, Circuit Judges.

SWAN, C. J.: This is an action by plaintiff for alleged breach of contract by wrongfully discharging him from defendant's employment as an airplane pilot. Upon American's motion, Judge Metzner dismissed the amended complaint, pursuant to F.R.C.P. 12(b)(6), for failure to state a claim upon which relief can be granted.*fn1 Federal jurisdiction of the action is based on diversity of citizenship.

The amended complaint alleges the following: In 1951 the parties agreed that plaintiff would serve defendant as an airplane pilot as long as he maintained the proper qualifications for such position. This contract is governed by the collective bargaining agreement between the Air Line Pilots Association and American. Plaintiff performed his contract so satisfactorily that in 1955 he was promoted to a flight captain (first pilot). On March 15, 1959, a cargo airplane of which he was "pilot in command" crashed when attempting to land at Midway Airport in Chicago, Illinois. On April 29, 1959, American notified plaintiff of the termination of his employment because of his failure to exercise the requisite degree of skill during the attempt to land. Plaintiff requested a hearing; his request was granted, and the hearing was commenced on June 5, 1959, but was never completed. By its letter, dated June 26, 1959, American informed plaintiff that it concluded he had abandoned the discharge hearing procedures as outlined in the Company's agreement with the Air Line Pilots Association.*fn2 A subsequent letter dated January 11, 1960, notified him that American considered "the matter of your discharge closed. You are hereby notified accordingly."*fn3 Thereafter, on March 19, 1962, plaintiff filed his original complaint. His amended complaint was filed April 19, 1962. Paragraph 19 of the first count alleged that:

"By reason of the aforesaid refusal by defendant to grant plaintiff a hearing, or to complete the originally scheduled hearing, defendant has unlawfully discharged plaintiff from defendant's employ, and by reason of its refusal to employ plaintiff, defendant has breached its contract of employment with plaintiff."

There was a second count, paragraph 23 of which asserted:

"Defendant's termination of plaintiff's employment on the basis of an unsupported charge constitutes an unlawful discharge, and its refusal to employ plaintiff for such reason constitutes a breach of its contract of employment with plaintiff."

Appellant argues that the grievance procedure with respect to his discharge was defective because (1) there was no statement by American of the precise charges against him, and (2) the hearing, once commenced, was never completed.*fn4 Appellee contends that appellant's failure to exhaust the remedies provided by the grievance procedure precludes judicial intervention. We hold that the appellee's contention is correct.

One preliminary matter needs to be mentioned. The District Judge stated that in deciding American's motion to dismiss the amended complaint, he would ignore the accompanying affidavits. The taking of affidavits on a motion under Rule 12(b)(6) is a matter within the trial court's discretion. If such affidavits are taken the motion to dismiss is treated as one for summary judgment under Rule 56.*fn5 Since the trial judge could not properly have dismissed the action without reference to matters dehors the amended complaint itself, it would seem that he treated the motion as one for summary judgment, his own statement to the contrary notwithstanding.Consequently we shall review his disposition of the motion in that light.*fn6

Appellant argues that the amended complaint states a claim upon which relief should be granted under Moore v. Illinois Central R.R ., 312 U.S. 630 (1941). In that case the Supreme Court held that an employee subject to the provisions of Title I of the Railway Labor Act, 45 U.S.C. §§ 151-163, might elect to treat his discharge as final and sue for damages without pursuing his administrative remedy before the adjustment board created by § 153 of the statute. Title II of the Railway Labor Act (45 U.S.C. §§ 181-188), applicable in this case, relates to procedures in the aviation field analogous to those in the railroad field under Title I. Section 184 provides for the creation of boards of adjustment for each airline by contract.*fn7 The Moore holding applies under both Titles. Transcontinental & Western Air., Inc. v. Koppal, 345 U.S. 653, 660.

However, the scope of the Moore doctrine has been successively whittled away by later cases. Slocum v. Delaware, L & W R.R ., 339 U.S. 239, limited Moore to its own facts. Slocum involved a jurisdictional dispute between two rival unions; the employer brought a declaratory judgment action joining both unions as defendants. The Supreme Court held the suit would not lie because exclusive jurisdiction was vested in the adjustment board. Transcontinental & Western Air., Inc. v. Koppal, supra, placed a further limitation on the Moore doctrine. In Koppal, a suit for wrongful discharge, the Court held that an airline employee who had invoked the initial steps of the grievance procedure but had not pursued them to completion, was required to resort to the state law on the question of exhaustion of remedies.The Court noted that in Moore the applicable state law (Mississippi) had not required exhaustion.A subsequent case, Pennsylvania R.R. v. Day, 360 U.S. 548, 553 points out that Moore represents an execption to the general rule that the adjustment board has primary jurisdiction in cases involving the interpretation of collective bargaining agreements. See also Union Pacific R. Co. v. Price, 360 U.S. 601, 609 n. 8; and article by Professor Summers, Individual Rights in Collective Agreements and Arbitration, 37 N.Y.U.L. Rev. 362, 386 n. 114.

Relying upon the Koppal decision, American contends that New York law is applicable here and that it requires exhaustion of the grievance procedure before resort to litigation. Brennan v. Delaware L&WR.R. Co ., 303 N.Y. 411, is cited to support the contention. We do not think it apposite.*fn8

Judge Metzner could find no New York cases bearing directly on the question of exhaustion of remedies in the factual setting presented by plaintiff's suit. But he did find cases placing on an employee an obligation to abide by remedies set out in the collective agreement once he had chosen to enforce a right allegedly arising thereunder. Panzarella v. New York Cent. System, Inc ., Sup. Ct., 27 Misc. 2d 57, 207 N.Y.S. 2d 933 (1960); Spilkewitz v. Pepper, N.Y. City Ct., 159 N.Y.S. 2d 53 (1957); Di Rienzo v. Farrand Optical Co ., Municipal Ct., 148 N.Y.S. 2d 587 (1956); Johnson v. Kings County Lighting Co ., Sup. Ct., 141 N.Y.S. 2d 411 (1955).

We think these cases reflect a sound policy, and one which should be controlling in this case. In recent years it has become increasingly clear under § 301 of the Labor Management Relations Taft-Hartley Act, 29 U.S.C. § 185, that federal law would control a suit by an individual employee for a discharge alleged to be in contravention of a collective bargaining agreement. See Textile Workers v. Lincoln Mills, 353 U.S. 448; Charles Dowd Box Co. v. Courtney, 368 U.S. 502; Local 174, Teamsters Union v. Lucas Flour Co ., 369 U.S. 95; Smith v. Evening News Ass'n, 31 U.S.L. Week 4041 (U.S. Dec. 10, 1962). This line of cases is not directly controlling in the instant case, since §§ 2(2) and 2(3) of Taft-Hartley, 29 U.S.C. §§ 152(2) and 152(3), specifically exclude from the coverage of that act employers and employees subject to the Railway Labor Act, 45 U.S.C. §§ 151-188, as are the parties here. The Railway Labor Act contains no provision similar to Taft-Hartley § 301, and the Supreme Court has not considered the Lincoln Mills decision in a Railway Labor Act context. Nevertheless, the reasoning of the cases from Lincoln Mills to Smith v. Evening News would seem as applicable in the case of a discharged railroad or airline employee as in that of a discharged textile worker.

Under the Lincoln Mills approach, a court in fashioning federal law may draw on relevant state law; any "state law applied * * * will be absorbed as federal law." 353 U.S. at 457. Whether our decision in the instant case be based upon state law which has been so "absorbed" under Lincoln Mills, or merely follows New York law under the familiar doctrine of Erie R.R.Co. v. Tompkins, 304 U.S. 64, the result in this case would be the same.

In the instant case, appellant's claim that his discharge was wrongful rests on his contention that American breached sections 27 A.1 and 27A.4 of the collective agreement in that it denied him the hearing and failed to set out the precise charges required by those sections. Yet sections 27B.1 and 27C.1 of the same agreement state that decisions at the various levels of the grievance procedure must be appealed within 10 days; otherwise, they become "final and binding."*fn9 Appellant contends that no such decision was ever made known to him. We cannot agree. Whether or not American's letter of June 26, 1959 constituted such a "decision," we think the subsequent letter of January 11, 1960 did. Under the New York cases cited above, appellant cannot come into court demanding relief under some provisions of the contract - section 27A.1 and 27A.4 - while disregarding others - sections 27B.1 and 27C.1 - which make the unappealed decision of January 11, 1960 "final and binding."

Furthermore, where a labor agreement provides for arbitration or other internal resolution of disputes, this court has held that questions of "procedural arbitrability" should be decided by an arbitrator, and that only questions of "substantive arbitrability" are for the courts. Livingston v. Wiley, 2 Cir., - F.2d - (January 11, 1963). Whether the letter of January 11, 1960 (note 3, supra) constitutes a "decision" requiring Larsen to take his next step in the grievance procedure is a procedural question. He failed to appeal.

Judgment affirmed.


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