Claxon said:
"USAPA UPDATE
Today, United States District Judge Conrad issued a preliminary injunction in the consolidated
Bollmeier / DJ Action matter pending in the United States District Court for the Western District of North Carolina, Charlotte Division. Judge Conrad’s order grants, in part, the
Bollmeier plaintiffs’ request that USAPA be enjoined from certain activities. At the hearing on June 30th the Judge instructed the parties to meet and confer to determine proposed temporary restraints upon which they could agree. In light of the Ninth Circuit’s ruling USAPA agreed that it would not spend any more money on merger or seniority related matters and that it would not dissolve without prior written notice to the Plaintiffs and approval by the court. The
Bollmeier Plaintiffs sought a much broader set of temporary and preliminary restraints, however, including requests for the Court to enjoin USAPA from expending any funds for any reason, enjoining it from sharing any merger committee “work product”, and an “independent” accounting for all funds expended. Judge Conrad declined the
Bollmeier Plaintiffs’ request for very broad restraints, specifically noting that the injunction he issued “would not make it impossible for USAPA to continue to operate” (
Doc. 75, at 11).
While we are, of course, disappointed that the Court did not dismiss the case at this juncture, we are gratified that it did not grant Plaintiffs the sweeping injunctive relief that they sought. Rather, the Court granted the injunction along the lines of the restraint USAPA had indicated it viewed as consistent with the Ninth Circuit’s ruling and USAPA’s withdrawal from the McCaskill-Bond seniority list integration process."
USAPA Communications
USAPA Communications vs Reality
A. Likelihood of Success on the Merits
The Court finds that Plaintiffs are likely to succeed on the merits of their claims.
Specifically, the Court finds that Plaintiffs furnished sufficient evidence of the written demands
sent to USAPA and its governing officers. After reviewing Plaintiffs’ Verified Complaint and
other exhibits, the Honorable Max O. Cogburn, Jr. found that good cause existed to permit
Plaintiffs’ action to proceed. See (Case No. 3:15-mc-35, Doc. No. 2). The Court finds that
Plaintiffs made a demand that USAPA or its governing officers initiate an action, that they
secured permission from this Court to bring the instant action, and that they are seeking
“appropriate relief for the benefit of the labor organization.” See 29 U.S.C. § 501( ; Reed v.
United Transp. Union, 633 F. Supp. 1516, 1527 (W.D.N.C. 1986) rev'd on other grounds, 828
F.2d 1066 (4th Cir. 1987). Accordingly, the Court finds that it has subject matter jurisdiction
over the claims in this case and that Plaintiffs have satisfied the procedural requirements under
the LMRDA. The Court further finds that the doctrine of res judicata does not apply to bar this
action.
B. Irreparable Harm
Plaintiffs have likewise made a clear showing of irreparable harm. USAPA’s funds were
derived from dues collected from all US Airways pilots, including Plaintiffs, as a condition of
employment. Under USAPA’s constitution, if such funds are not used to advance legitimate
collective legal action, they must be returned to the members from whom the funds were
collected in the first place. Now that USAPA is no longer the certified exclusive representative
for any pilot group, it no longer collects membership dues, and its revenue stream has been cut
off. USAPA’s continued expenditure of its finite funds, which are the object of this litigation,
can only deplete a treasury that is unable to be replenished going forward.
Therefore, the Court
finds that Plaintiffs have shown they are likely to suffer irreparable harm in the absence of
preliminary relief.
C. Balance of Equities
The balance of equities often presents considerable questions for the Court, especially as
an injunction risks foreclosing legitimate business activities of a defendant. The Court finds in
this case, however, that Plaintiffs have provided sufficient evidence to tip the balance in their
favor. Plaintiffs seek to enjoin USAPA and its agents from wrongfully spending funds which
were derived in significant part from dues paid by Plaintiffs. Absent an injunction, these funds
may be significantly, if not altogether, depleted before this case is concluded, which would result
in an inequity against Plaintiffs. On the other hand, an injunction prohibiting USAPA’s use of its
funds to participate in the SLI process risks little to no harm to Defendants as Defendants, like
the Plaintiffs, could seek funding from other sources and raise funds through private channels in
order to further finance their continued involvement in the SLI process.
Contrary to Defendants
contentions, the Court finds that this injunction would not make it impossible for USAPA to
continue to operate. Therefore, the Court finds that the balance of equities tips in favor of
Plaintiffs.
D. Public Interest
Finally, the Court finds that the public interest is furthered by the granting of a
preliminary injunction. The public has an interest in seeing that agreements are enforced. See
UBS Painwebber, Inc. v. Aiken, 197 F. Supp. 2d 436, 448 (W.D.N.C. 2002). As both parties
have agreed, this interest includes enforcing union constitutions. Loretangeli v. Critelli, 853 F.2d
186, 196 (3d Cir. 1988).
In finding that Plaintiffs have established a likelihood of success on the
merits on their LMRDA claim, the Court finds that Defendants have likely violated the USAPA
constitution. Therefore, the Court finds that an injunction is in the public interest.
Having considered the four requisite elements for preliminary injunctive relief and
having found that Plaintiffs have established all four elements, the Court finds that entry of a
preliminary injunction is necessary to protect Plaintiffs from ongoing and irreparable harm
during the pendency of this action. Such harm to Plaintiffs significantly outweighs any harm
Defendants might incur as a result of the entry of the injunction.
E. Parties to be Enjoined
It is well-settled that a business entity acts only through its agents, such as its employees,
officers, and directors. See Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 166 (2001).
As such, an enjoined entity’s agents may also be individually enjoined. As Defendants point out,
the USAPA constitution requires that all notes, checks, and other negotiable instruments must be
signed by one of its National Officers. (Doc. No. 61 at 9 n.6). Thus, an officer acting
individually pursuant to his or her perceived duties as an officer, may authorize the expenditure
of USAPA funds in contravention to this preliminary injunction.
The Court finds, therefore, that
it is necessary to enjoin USAPA as well as any officer, employee, or agent of USAPA.
F. Scope of Prohibited Expenditures
The funds USAPA has been using to participate in merger- and seniority-related matters
and to further litigation were derived, in large part, from dues paid by Plaintiffs and other West
Pilots. USAPA should not be permitted to use funds derived from West Pilots to the detriment
of the West Pilots. Defendants previously argued that USAPA had incurred less than $15,000 in
expenses prior to June 29, 2015. (Doc. No. 58). Defendants now contend, however, that they
should be permitted to pay expenses incurred through June 30, 2015, in an amount of $500,000.
(Doc. No. 61-2 at 2). The Court finds this amount unreasonable and will not permit USAPA to
make these expenditures out of its treasury.
Therefore, the Court finds that, aside from a
reasonable amount expended related to USAPA’s Petition for Re-hearing En Banc in Addington
v. USAPA, _ F.3d _, 2015 WL 3916665 (9th Cir. June 26, 2015),2 not to exceed $50,000
USAPA and any officer, employee, or agent of USAPA shall be enjoined from spending any
more money on merger- or seniority-related matters.
H. The Unapproved Dissolution of USAPA
In light of the Court’s findings that injunctive relief is warranted in this case, the Court
GRANTS this part of Plaintiffs’ Motion for Preliminary Injunction.
USAPA shall not be
dissolved without prior written notice to Plaintiffs and approval of the Court.