08-5959-cv, 09-2143-cv
`Ramey et al. v. Dist 141, Int’l Ass’n of Machinists and Aerospace Workers
`
`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
`
`SUMMARY ORDER
`
`RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
`SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
`BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
`WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
`MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
`NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
`OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
`
`At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
`Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,
`on the 27 day of January, two thousand and ten.
`th
`
`Present:
`
`ROSEMARY S. POOLER,
`RICHARD C. WESLEY,
`Circuit Judges,
`JOHN F. KEENAN,*
`District Judge.
`_____________________________________________________
`
`GARY H. RAMEY; DEAN R. DROZ; EUCLIDES PAIM; DENNIS J. SEATH; RYAN T.
`ABDOOL; THOMAS P. O'GRADY; JOSEPH R. CUMMINGS; ANTHONY GRGINOVICH;
`PETER T. EHRLING; MARTIN HIGGINS; JOSEPH PESCATORE; JOHN I. RUDIC; ROCCO
`F. SALERNO; MICHAEL J. DUNNE; GARRY HAGSTROM; MICHAEL A. PITELLI; JOHN
`MCARDLE; THOMAS J. ENG; WILLIAM MOSKOWITZ; MICHAEL J. ANDREWS;
`LASZLO MAYER; WAYNE P. FEUERHERM; MICHAEL FRIM; CHARLES MORRO;
`JOHN UNTISZ; RAYMOND J. SIMUTA; JAMES M. LOWE; JACK K. GRIMES; DAVID R.
`HILL; JOHN W. LANE; STEPHEN R. CUNNINGHAM; ALAN W. COCKERHAM; GERALD
`W. DAVIDSON; ALLEN D. HILTON; ERIC J. STOFFER; GLENN R. PIGG; CHRISTOPHER
`A. KOBERG; ROBERT L. ENGLAND; EDWARD S. MOORE; RICHARD SHIMKUS;
`RICHARD ALLUZIO; ERNEST J. ANGELOSANTO; JAMES L. BARNES; NORMAND J.
`CASTONGUAY; LLOYD CHENEY; MICHAEL CHESNA; ROBERT P. CLINTON;
`RONALD E. COFFIN; JOHN H. CORKERY, III; JOHN N. D'ANGELO; KENNETH C.
`DANISEVICH; ELVIO DELISE; RONALD A. FRASER; JOSEPH J. HARRINGTON;
`JOSEPH R. HUARD; RALPH L. IMBRIANO; HERBERT L. JOHNSON, JR.; PETER D.
`LAWRENCE; ROBERT LEWIS; PAUL LEWIS; DONALD E. LOEBER; JOSEPH
`MCGRATH; WILLIAM A. MORGAN; GEORGE A. NICHOLS; EDWIN F. PARSONS, JR.;
`AND ROBERT E. SMITH, JR.
`
`Plaintiff-Appellees-Cross-Appellants,
`
` -v-
`
`08-5959-cv, 09-2143-cv
`
`John F. Keenan, of the United States District Court for the Southern District of New
`*
`York, sitting by designation.
`
`

`
`DISTRICT 141, INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE
`WORKERS, AND INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE
`WORKERS, AFL-CIO,
`
` -v-
`
`Defendant-Appellant-Cross-Appellees,
`
`KENNETH THIEDE, in his capacity as President and General Chairman of District 141,
`International Association of Machinists and Aerospace Workers; DAVIS SNYDER a/k/a/ David
`“DUKE” SNYDER, in his capacity as Assistant General Chairman, District 141, International
`Association of Machinists and Aerospace Workers; US AIRWAYS GROUP, INC.; US AIR, INC.
`a/k/a/ US AIRWAYS, INC.; SHUTTLE, INC. and JOHN AND JANE DOES 1-20,
`
`Defendants.
`
`
`Appearing for Appellant-Cross-Appellees:
`
`Joseph Guerrieri, Jr. (Jeffrey A. Bartos, Angela
`Serranzana on the brief) Guerrieri, Edmond,
`Claymon & Bartos, P.C., Washington, DC
`
`
`
`Appearing for Appellees-Cross-Appellants: Eric M. Nelson, New York, NY
`
`Appeal from the United States District Court for the Eastern District of New York (Cogan, J.;
`Korman, J.).
`
`ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
`AND DECREED that the judgment of said District Court be and it hereby is VACATED in part
`and REMANDED to the district court to consider appropriate damages in light of the failure of
`several plaintiffs to meet their duty to mitigate, and also the matter of attorney’s fees for the
`damages portion of the litigation.
`
`The International Association of Machinists and Aerospace Workers and the International
`Association of Machinists and Aerospace Workers, AFL-CIO and its District Lodge 141 (the
`“IAM”) appeal from the judgment of the United States District Court for the Eastern District of
`New York (Cogan, J.) entered on November 24, 2008 in which plaintiffs were awarded damages
`for breach of the duty of fair representation under the Railway Labor Act (“RLA”) 45 U.S.C. §
`141 et seq. following a bench trial. Plaintiffs cross appeal the district court’s denial of their second
`application for attorney’s fees. We assume the parties’ familiarity with the facts and the
`proceedings below.
`
`The 26 plaintiffs in the present stage of this litigation are former employees of Eastern
`1
`Airlines (“Eastern”). Most began working for Eastern in the 1960s or the 1970s as mechanics on
`what was then the Eastern Shuttle. Eastern entered bankruptcy in 1999, and after a series of
`
` There were 66 plaintiffs in the original action, some of whose claims have been
`1
`dismissed at various stages of the litigation.
`
`2
`
`

`
`transactions, plaintiffs eventually worked for U.S. Airways Shuttle (“Shuttle”). When plaintiffs
`became U.S. Airways employees in 1999, the IAM assigned them classification seniority dates of
`1989, rather than earlier dates reflecting their time at Eastern.
`
`After a series of efforts by U.S. Airways management to restore profitability to the airline,
`and pursuant to amendments to the collective barging agreement between U.S. Airways and the
`IAM, plaintiffs were furloughed between January and April, 2003. On July 30, 1999, plaintiffs
`filed a complaint in the Eastern District of New York, alleging breach of the duty of fair
`representation under the RLA for failing to accord them proper seniority after the merger. Judge
`Korman, to whom this matter was originally assigned, bifurcated the case into a liability phase
`and a damages phase.
`
`At the liability phase, on August 5, 2003 the district court entered judgment for the
`plaintiffs on their duty of fair representation claim. On August 10, 2004, the Second Circuit
`affirmed. Ramey v. Dist. 141, Int’l Ass’n of Machinists and Aerospace Workers, 378 F.3d 269,
`284 (2d Cir. 2004).
`
`The district court then referred the issue of potential damages to Magistrate Judge Robert
`M. Levy, who issued a Report and Recommendation concerning the available damages. On
`February 7, 2008, the district court issued an order outlining the standard to be applied in
`assessing damages. Judge Cogan found that the ultimate burden of proof that the plaintiffs’
`injuries were caused by foreseeable events would rest with the plaintiff.
`
`A bench trial followed in April 2008. On October 23, 2008, Judge Cogan issued an Order
`containing his Findings of Fact and Conclusions of Law. Judge Cogan held that the terrorist
`attacks were not an intervening cause of the job losses in 2001-2003. In addition, he rejected the
`defendants’ arguments that plaintiffs had insufficiently failed to mitigate damages, and that the
`severance pay and unemployment compensation received by each of the furloughed plaintiffs
`should be properly excluded from plaintiffs’ back pay recovery.
`
`Judgment was entered on November 24, 2008, awarding total damages of approximately
`$2.25 million. Defendants now appeal those damages awards.
`
`Plaintiffs submitted their original application for attorney’s fees on September 19, 2003.
`On February 25, 2005, Judge Levy proposed that plaintiffs’ initial fee application be granted, and
`that the amounts be set after a conference with the parties. Judge Korman then adopted Judge
`Levy’s recommendations.
`
` On January 7, 2009, after the end of the damages phase of this case, plaintiffs filed the
`second fee application (which is at issue on this appeal), covering the period from January 4, 2005
`through January 6, 2009, and requesting fees and costs, totaling $462,278.36. The district court
`denied the application for attorney’s fees, finding that “the damages trial did not confer a
`substantial benefit on the IAM membership.” Appellees cross-appeal with respect to the second
`Fee Order only.
`
`3
`
`

`
`This Court “reviews the District Court's findings of fact for clear error, but we review de
`novo its conclusions of law and its resolution of mixed questions of fact and law.” MacWade v.
`Kelly, 460 F.3d 260, 267 (2d Cir. 2006). We review a decision on attorney’s fees under an abuse
`of discretion standard. Hall v. Cole, 412 U.S. 1, 15 (1973).
`
`Appellant first argues that the district court erred in failing to apply the constructive
`discharge to plaintiffs’ claims. We have explained that “[c]onstructive discharge of an employee
`occurs when an employer, rather than discharging an individual, intentionally creates an
`intolerable work atmosphere that forces an employee to quit involuntarily.” Flaherty v. Metromail
`Corp., 235 F.3d 133, 138 (2000). “A court may find a constructive discharge where the employee
`resigns because an employer causes to exist conditions of such an unpleasant nature that any
`reasonable person in the employee’s place would do the same.” Id. (internal citations and
`quotation marks omitted).
`
`Appellant blurs the line between “furlough” and “resignation.” Appellees correctly assert,
`in the alternative, that accepting furlough is not equivalent to resigning one’s job, and the record
`indicates as such. The agreement between IAM and U.S. Airways last modified on January 10,
`2003 provides that “[t]he company will consider furloughed covered employees for vacancies
`under the Agreement prior to hiring new employees to fill such vacancies,” and that “[e]mployees
`on furlough shall continue to accrue seniority for a maximum of five (5) years, and thereafter shall
`only maintain their seniority status while on furlough.”
`
`The contract between the union and the airline explicitly drew a distinction between
`furlough and discharge. This distinction rested on a real difference in employees’ status with U.S.
`Airways. Since plaintiffs were not actually discharged, and instead maintained an employment
`relationship with U.S. Airways, we see no error in the district court’s failure to apply a
`constructive discharge standard.
`
`Appellant next argues that the district court erred in finding that the plaintiffs had failed to
`mitigate damages. In order for a plaintiff to recover on a fair representation claim, he must show
`that he “use[d] reasonable diligence in finding other suitable employment.” Greenway v. Buffalo
`Hilton Hotel, 143 F.3d 47, 53 (2d Cir. 1998) (citing Ford Motor Co. v. EEOC, 458 U.S. 219, 231
`(1982)). This duty, however, is “not onerous.” Dailey v. Societe Generale, 108 F.3d 451, 456 (2d
`Cir. 1997) The “unemployed or underemployed claimant need not go into another line of work,
`accept a demotion, or take a demeaning position,” but “he forfeits his right to back pay if he
`refuses a job substantially equivalent to the one he was denied.” Ford, 458 U.S. at 231-32.
`
`“[A]n assessment of the reasonableness of a plaintiff's effort to mitigate encompasses
`more than a simple review of the duration of his or her job search, or of the plaintiff's initial
`estimates as to how long a successful job search might take; instead, it entails a consideration of
`such factors as the individual characteristics of the claimant and the job market, as well as the
`quantity and quality of the particular measures undertaken by the plaintiff to obtain alternate
`work.” Dailey, 108 F.3d at 456 (internal quotation marks and citation omitted). The defendant
`bears the evidentiary burden of showing that the plaintiff has failed to satisfy the duty to mitigate.
`Id.
`
`4
`
`

`
`This Circuit has found that “[i]f . . . an employer proves that the employee has not made
`reasonable efforts to obtain work, the employer does not also have to establish the availability of
`substantially comparable employment.” Greenway, 143 F.3d at 54 (internal citation and quotation
`marks omitted). Appellant points to the fact that plaintiffs Droz, O’Grady, Lowe, and Simuta
`presented no evidence that they could not have obtained other employment.
`
`Lowe was asked if he had made “any effort to look for other work . . .” and he responded
`that he had not. Simuta, O’Grady, and and Droz all made similar statements in their depositions.
`As a general matter, appellant suggests that the plaintiffs’ “mitigation efforts varied widely, and
`thus in this case it would have been particularly important for the court below to make
`individualized findings, rather than relying on assumptions about the group as a whole.”
`Appellant also suggests that the fact that some plaintiffs were able to find work with other
`employers (Andrews and Higgins) should weigh against finding that the other plaintiffs met their
`duty to mitigate.
`
`We conclude that the district court erred by giving insufficient attention to these
`statements by Droz, O’Grady, Lowe, and Simuta with respect to their failure to mitigate damages.
`Even though the burden of proof rested on the defendants, the admissions by these plaintiffs that
`they made no attempts to mitigate damages seems to this panel to be quite damaging, and the
`district court did not give adequate consideration to this part of the record..
`
`With respect to the other 19 plaintiffs who were awarded damages, the district court
`correctly found that defendants had failed to meet their burden of proof, and there is no evidence
`that these plaintiffs made insufficient efforts to seek alternate work. The record below is, in fact,
`rife with examples of the plaintiffs’ job search activities. Paim took on additional hours at his part
`time job, and Pitelli, McCardle, Pescatore, Ehrling, Cummings, F. Salerno, and Higgins became
`bench technicians at AAR. Untisz, Grginovich, and Eng also attempted to continue working at
`U.S. Airways after the furloughs. As for the eight remaining plaintiffs, defendants produced no
`evidence that they failed to seek out alternate work, and so have not met their burden.
`
`Appellant’s final claim on appeal is that the district court erred in failing to offset
`severance pay and unemployment compensation from the back pay awards. In Dailey, we found
`that “the decision whether or not to deduct unemployment benefits from a Title VII back pay
`award rests in the sound discretion of the district court.” 108 F.3d at 460. “We do not believe that
`the rule . . . requiring the deduction of these collateral benefits is appropriate, particularly in view
`of the compelling reasons, expressed by many of our sister circuits, that a district court might
`decline to deduct unemployment insurance from back pay.” Id. at 460-61. The district court was
`also within its discretion to decline to offset the severance payments from the damages awards.
`See Cunningham v. Rederiet Vindeggen A/S/, 333 F.2d 308, 317 (2d Cir. 1964).
`
`Plaintiffs cross appeal only the district court’s denial of their second fee application. This
`Court reviews an attorney’s fee award in fair representation cases under an abuse of discretion
`standard. Rodonich v. Senyshyn, 52 F.3d 28, 33 (2d Cir. 1995). We conclude that the district
`2
`court erred as a matter of law in denying the application for fees.
`
` An abuse of discretion standard applies under the Labor Management Reporting and
`2
`Disclosure Act, 42 U.S.C. § 412, and the parties do not suggest that a different standard should
`apply in fair representation cases arising under the RLA. See Rodonich, 52 F.3d at 33.
`
`5
`
`

`
`Attorney’s fees are recoverable in circumstances where “the litigation has conferred a
`substantial benefit on the members of an ascertainable class.” Mills v. Elec. Auto-Lite Co., 396
`U.S. 375, 393-94 (1970). In fair representation cases, the threshold question in determining
`whether or not defendants’ should bear the burden of attorney’s fees is whether the “litigation
`ha[s] the potential to confer a common benefit to” the union membership. Cruz v. Local Union
`No. 3, 34 F.3d 1148, 1158 (2d Cir. 1994).
`
`In its consideration of the plaintiffs’ application for fees, the district court relied on the
`Sixth Circuit’s assertion in Argentine v. United Steelworkers of America, AFL-CIO, 287 F.3d
`476, 489 (6th Cir. 2002) that for the common benefit doctrine to apply, “the [union] members
`[must] share[] in the benefit of the suit in the same way as the plaintiff[s].”
`
`
`The district court’s formulation of the common benefit doctrine under Argentine, however,
`is not the law in this Circuit. The assertion that the plaintiffs and the union members must
`“share[] in the benefit of the suit in the same way,” Argentine, 287 F.3d at 489, taken to its logical
`extension, suggests that an award of damages could never provide a common benefit to the union
`membership. In Rodonich, we expressly rejected this position. See 52 F.3d at 35 (holding that
`“each member of the union [need not] receive precisely the same benefits as the plaintiff”).
`
`We find that the district court erred in applying a standard that would preclude damages
`awards from conferring a shared benefit. We therefore remand to the district court so that it can
`reconsider the plaintiffs’ second application for attorney’s fees under the appropriate standard, and
`to clarify whether it understood Argentine to require that the plaintiffs and other members share in
`the benefit in both kind and degree and, if so, to reevaluate this issue without applying that
`requirement.
`
`Accordingly, the judgment of the district court is hereby VACATED in part and the case
`is REMANDED to consider the question of mitigation with respect to several plaintiffs and the
`matter of attorney’s fees.
`
`FOR THE COURT:
`Catherine O’Hagan Wolfe, Clerk
`
`
`6