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NORTH AMERICAN AIRLINES v. INT'L BROTHERHOOD OF TEAMSTERS

United States District Court, S.D. New York


April 18, 2005.

NORTH AMERICAN AIRLINES, INC., Plaintiff,
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO and TEAMSTERS LOCAL 747, AIRLINE DIVISION, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO, Defendants.

The opinion of the court was delivered by: KENNETH KARAS, District Judge

ORDER AND OPINION

I. Introduction

In North American Airlines v. International Brotherhood of Teamsters, No. 04 Civ. 9949, 2005 WL 646350 (S.D.N.Y. Mar. 21, 2005) ("North American I"), this Court dismissed the above captioned action for lack of subject matter jurisdiction and, in the alternative, as an imprudent exercise of its discretionary authority under the Declaratory Judgment Act. For purposes of the instant motion, the Court assumes familiarity with that decision. Ten days after that opinion was issued, and eight days after Plaintiff North American Airlines ("North American") filed a notice of appeal, North American filed a motion for a "stay pending appeal" "[p]ursuant to [Fed.R.Civ.P.] 62 and 65(a)(1)." (North American Mem. at 1) While North American does not specify which section of Rule 62 it intends to invoke, by referring to Rule 65(a)(1) and by explicitly requesting a preliminary injunction in its supporting memorandum of law (North American Mem. at 12), it appears that North American seeks to enjoin the International Brotherhood of Teamsters ("IBT" or "Union") from continuing to prosecute the parallel action in the Northern District of California ("California Action"), pursuant to Rule 62(c),*fn1 pending resolution of the appeal from the motion to dismiss. (North American Mem. at 12). For the reasons outlined below, the motion to stay is DENIED.

  II. Discussion

  When a notice of appeal is filed, jurisdiction over the matters being appealed normally transfers from the district court to the appeals court. See Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 379 (1985) ("In general, filing of a notice of appeal confers jurisdiction on the court of appeals and divests the district court of control over those aspects of the case involved in the appeal."). An exception exists under the Federal Rules of Civil Procedure. however, that allows the district court to retain jurisdiction to issue an order to preserve the status quo pending appeal.

  "A motion to stay is governed by Federal Rule of Civil Procedure 62(c). Issuance of a stay pending appeal is discretionary and equitable. . . ." Hayes v. City Univ. of New York, 503 F. Supp. 946, 962 (S.D.N.Y. 1980), aff'd, Hayes v. Human Res. Admin. of City of New York, 648 F.2d 110 (2d Cir. 1981). "Four criteria are relevant in considering whether to issue a stay of an order of a district court . . . pending appeal: the likelihood of success on the merits, irreparable injury if the stay is denied, substantial injury to the party opposing a stay if one is issued, and the public interest." Mohammed v. Reno, 309 F.3d 95, 100 (2d Cir. 2002); see also In re Suprema Specialities, Inc., No. M-47, 2005 WL 120352, at *1 (S.D.N.Y. Jan. 20, 2005). After examining these factors, the Court concludes that the motion to stay should be denied.

  A. Likelihood of Success on the Merits

  "Although historically there has been much uncertainty about how likely the movant's chances of success must be to warrant a stay, the Second Circuit has recently approved an approach that relates the likelihood of prevailing to the other considerations: `[t]he necessary level or degree of possibility of success will vary according to the court's assessment of the other [stay] factors.'" Greenidge v. Allstate Ins. Co., No. 02 Civ. 9796, 2003 WL 22871905, at *2 (S.D.N.Y. Dec. 3, 2003) (quoting Mohammed, 309 F.3d at 101) (additional citations and quotations omitted). Accordingly, a stay may be granted where "the likelihood of success is not high but the balance of hardships favors the applicant . . . and where the probability of success is `high' and `some injury' has been shown." Mohammed, 309 F.3d at 101 (internal citations omitted); see also In re Suprema Specialities, 2005 WL 120352, at *1. Because as discussed below the irreparable harm is minimal, the probability of success must be high in order for North American to prevail on its claim. Cayuga Indian Nation of New York v. Vill. of Union Springs, 317 F. Supp. 2d 152, 155 (N.D.N.Y. 2004) ("[A] strong showing of likelihood of success is required where irreparable injury is not very evident."). "Mere repetition of arguments previously considered and rejected cannot be characterized as a `strong showing' [of likelihood of success on the merits]." Schwartz v. Dolan, 159 F.R.D. 380, 384 (N.D.N.Y. 1995), judgment vacated in part, 86 F.3d 315, 318 (2d Cir. 1996) (noting that it also denied stay pending appeal).

  North American advances three arguments in support of its claim that this Court erred in North American I, and therefore that North American is likely to succeed on the merits of its appeal: (1) North American maintains that the Declaratory Judgment Act operates only prospectively, thereby suggesting that this Court erred in ruling that its declaratory judgment action was premature; (2) North American suggests the Court discounted the threat of litigation, a claim that also relates to the Court's ruling that it lacked jurisdiction; and (3) North American argues the Court abused its discretion in suggesting that "the New York litigation should be stopped in its tracks because it threatens judicial interference with ongoing labor negotiations" (North American Reply Mem. at 5), a claim that relates to the Court's separate ruling that it would not exercise its discretion under the Declaratory Judgment Act to keep the case.*fn2 First, North American argues that the "Declaratory Judgment [Act] operates prospectively only and is not available with respect to changes already implemented or to determine liability for past actions." (North American Reply Mem. at 2) The implication of North American's argument seems to be that because a declaratory judgment operates only prospectively, North American could not have obtained declaratory relief after adopting unilateral changes to the terms and conditions of the employment of the unionized pilots. Thus, according to this view, the Court erred in ruling that there was no actual controversy since no unilateral changes had been adopted. In fact, it appears that this premise may have guided North American's strategy in anticipation of this litigation. However, this supposition is flawed. North American cites no authority for the proposition that declaratory judgments can only operate as assumed by North American. On the contrary, parties routinely seek a declaration that their prior actions were permissible. For example, in Kidder, Peabody & Co. v. Maxus Energy Corp., the Second Circuit affirmed the district court's entry of a judgment that the declaratory plaintiff had not violated certain provisions of the federal securities laws during a corporate merger that had been consummated approximately four years prior to the declaratory judgment action. 925 F.2d 556, 558-62 (2d Cir. 1991).

  Second, North American suggests this Court improperly discounted the threat of litigation. North American argues that the threats by IBT were sufficient to create a reasonable apprehension of litigation by North American, and therefore established a case or controversy. (North American Mem. at 7)*fn3 In repeating the unsuccessful argument it initially made in response to IBT's motion to dismiss, North American relies primarily on Atlas Air, Inc. v. Airline Pilots Ass'n, 69 F. Supp. 2d 155, 163 (D.D.C. 1999), overruled on other grounds, 232 F.3d 218 (D.C. Cir. 2000). However, that case, and, in particular its resolution on appeal, undermines North American's claim. In Atlas Air, the district court was asked to issue a declaratory judgment for two distinct claims: one relating to a specific unilateral change that the airline already had implemented before seeking declaratory relief, and the other relating to a general claim that the airline had a right under the Railway Labor Act ("RLA") to alter unilaterally the terms and conditions of the unionized employees' employment under the status quo provisions of the RLA. Regarding the first, the district court ruled that it had jurisdiction to consider the legality of the airline's already-implemented exclusion of only union members from the airline's profit sharing plan, in light of numerous threats from the union that it will take "all appropriate action" to counter "the Company's intimidation and coercion." 69 F. Supp. 2d at 163. However, the district court ruled that it had do jurisdiction to consider the airline's general claim that it was entitled to a declaratory judgment that it had the right to make unilateral changes to the terms and conditions of the unionized pilots' employment, specifically noting that any threats of litigation were not real or immediate "on any specific issue." Id. at 164. On appeal, the D.C. Circuit agreed with the district court on this second point, holding: "That a union may posture in labor negotiations or otherwise threaten to respond to future changes is insufficient to create a reasonable apprehension of litigation necessary for the claim to be justiciable." 232 F.3d at 227 (emphasis added). It is this latter holding that is most applicable to this case since IBT's threats related generally to North American's claim that it had a general right to make unilateral changes to the terms and conditions of the pilots' employment and to some future changes proposed by North American (some of which it later altered). And, since North American had not adopted, let alone implemented, any of the changes it had presented during the collective bargaining negotiations, its reliance on Atlas Air is misplaced.*fn4 York litigation should be stopped in its tracks because it threatens judicial interference with ongoing labor negotiations." (North American Reply Mem. at 5) North American misconstrues the Court's holding with respect to this point.*fn5 In North American I, this Court held that the case's "chronology leaves little doubt that North American prematurely abandoned the collective bargaining process embodied in the RLA to seek refuge in the courts . . .," and that if North American is permitted to characterize narrow negotiating disputes as sufficient to create a case or controversy "either side in a collective bargaining negotiation could disrupt the negotiations by simply adopting a resolute philosophical position as to the legality of any one aspect of the negotiation. . . ." North American I, 2005 WL 646350, at *19. Thus, the Court's position was not that the New York litigation should be "stopped in its tracks because it threatens judicial interference," but rather that parties should not be allowed to use the declaratory remedy as obvious as parties could attempt to use the courts to manipulate the negotiating process. . . ."); see also id. at 17 (noting that the public interest "`does not require that the federal courts referee every tactical move in labor negotiations under the [RLA]'") (quoting Indep. Fed'n of Flight Attendants v. TWA, No. 81-6064, 1981 WL 2430, at *4 (W.D. Mo. Sept. 9, 1981)).

  In evaluating the likelihood of North American's success on appeal, it is important to repeat that this Court dismissed North American's Complaint for two independent reasons — one because North American's Complaint failed to allege an actual case or controversy, and the other because the Court declined to exercise its discretion under the Declaratory Judgment Act to keep the case. To prevail on its appeal of this Court's discretionary determination to dismiss the case, North American will have the burden of showing an abuse of discretion. See Dow Jones & Co., Inc. v. Harrods Ltd., 346 F.3d 357, 359-60 (2d Cir. 2003). Given that the only basis North American asserts in support of this argument is the inaccurate claim that the Court assumed that North American had terminated its negotiations with IBT, it is apparent that North American is not likely to prevail on appeal, thus independently supporting denial of the instant motion. Cf. Accident Fund v. Baerwaldt, 579 F. Supp. 724, 726 (W.D. Mich. 1984) ("That this was a discretionary decision . . ., which will be reviewed by the Court of Appeals only for an abuse thereof, serves to strengthen my conviction that the decision will be affirmed. Plaintiffs have presented me with no new issues or arguments which I had not considered when making my ruling, nor have they brought to the Court's attention any factual inadequacy upon which the Court relied."). Additionally, the Court concludes that North American will not suffer irreparable harm in the absence of the issuance of a stay. The Court notes initially that North American did not file this motion until ten days after the Court's decision was rendered, and eight days after the filing of the notice of appeal, thus undermining to some degree North American's claims of irreparable harm. See Hirschfeld v. Spanakos, 909 F. Supp. 174 (S.D.N.Y. 1995) ("As the Court of Appeals itself pointed out, the fact that such a delay severely undercuts a claim of irreparable injury, which is indispensable to the issuance of a stay, has been well established in this Circuit since at least 1989.") (citing Hirschfeld v. Bd. of Elections in the City of New York, 984 F.2d 35, 39 (2d Cir. 1993)).

  Moreover, North American has failed to substantiate its claim that it will suffer irreparable harm if a stay is not granted. North American's primary argument in support of its claim for irreparable harm is that it "could be placed in a `Catch-22' situation where it could be held in contempt by either the San Francisco or New York Federal Courts for complying with the other court's orders." (North American Mem. at 12) This argument is speculative and unpersuasive. It assumes, for example, that North American would be unsuccessful in seeking a stay in the California Action and that it will not prevail in its motion to dismiss or transfer that case. See Adam v. Jacobs, 950 F.2d 89, 93 (2d Cir. 1991) ("While the normal chronology would have been for the court of first impression . . . to have enjoined the second court, this procedure is not mandatory. The same policies are furthered by the second court's exercising judicial self-restraint."); Accident Fund, 579 F. Supp. at 728 ("An important consideration, apparently overlooked by Plaintiffs, is their freedom to seek injunctive relief in the state courts; a course of action clearly contemplated by the Pullman and Burford absention [sic] doctrines. Denial of Plaintiffs' motion will not leave them without a forum for injunctive relief. Indeed, since I believe Plaintiffs will ultimately be proceeding on the merits of their claims in the state tribunals, seeking interim relief in that forum, at this time, would seem prudent. The availability of this alternate course of action strengthens my conclusion that denial of injunctive relief will cause Plaintiffs no irreparable injury."). Indeed, the only representation that North American has made about the status of the California Action is that IBT has asked the court in California to resume the proceedings. (North American Mem. at 13-14) No information has been provided about North American's response to IBT's application or the California court's decision on how to proceed. Thus, based on the record before this Court, it is far from clear that North American faces a real possibility of irreparable harm from the mere pendency of the California Action. See Nat'l Fuel Gas Supply Corp. v. 138 Acres of Land in the Vill. of Springville, County of Erie, State of New York, 186 F. Supp. 2d 339, 343 (W.D.N.Y. 2001) ("The fact that there may be `parallel proceedings' in both state and federal court that may yield inconsistent results does not represent a threat of irreparable injury. Cases are legion where parallel proceedings, involving substantially the same parties contemporaneously litigating substantially the same issues in state and federal fora, take place. Parallel litigation, in and of itself, is not unusual in American jurisprudence.") (emphasis in original) (citations omitted).

  C. Substantial Injury to Party Opposing Stay

  While not overwhelming, IBT has demonstrated some injury from further delay. As IBT explains, "[a] stay will further delay resolution of the parties' labor dispute and undermine the collective bargaining process. The pilots are currently working under reduced rates of pay, rules and working conditions. Such changes alter the parties' collective bargaining by de facto requiring the pilots to negotiate back to where they were before they can achieve any gains from the terms of employment that were in effect at the time they voted in the union." (IBT Mem. at 7-8) Moreover, IBT persuasively argues that "continuing delay in the resolution of this dispute deprives the union of its opportunity to dispel the taint arising from the company's unilateral action [that was intended in part] to present the union as impotent and unable to achieve the pilots' goals." (IBT Mem. at 8)

  Thus, contrary to North American's suggestion, the issuance of a preliminary injunction actually disrupts, rather than preserves, the status quo by denying IBT the opportunity to obtain relief in another forum, and further delaying the resolution of the issues presented in this case.

  D. Public Interest

  This case does not appear to implicate the public interest factor as it is essentially "a purely private litigation." Greenidge, 2003 WL 22871905, at *3. To the extent, however, this factor is implicated, the Court concludes it counsels against issuing an injunction. The primary concern advanced by North American is that "permitting the Union to prosecute its action in California while the appeal in this action is pending will irreparably harm the judicial process . . . [by] permit[ing] other district courts to usurp [this Court's] jurisdiction." (North American Mem. at 13) This argument is specious. Indeed, the contrary appears to be true — an injunction which freezes the California Action despite the Court's holding that it has no jurisdiction over the present action would harm the judicial process by ignoring the fundamental rule that courts are not to act without jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998) ("`Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.'") (quoting Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514 (1868)). Thus, this factor further counsels in favor of denying the motion.

  IV. Conclusion

  For the reasons stated herein, North American's motion to stay and/or for an injunction pending appeal is DENIED.

  SO ORDERED.


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