REVISED - SEPTEMBER 27, 2000
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-10814
AMERICAN AIRLINES, INC.,
Plaintiff-Appellee,
V.
ALLIED PILOTS ASSOCIATION, RICHARD T. LAVOY,
and BRIAN A. MAYHEW,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of Texas
September 21, 2000
Before WIENER, BENAVIDES and PARKER, Circuit Judges.
ROBERT M. PARKER, Circuit Judge:
Defendants-Appellants, Allied Pilots Association (“APA”) and
two of its officers, appeal an adjudication of civil contempt
against them and an award of compensatory damages for that
contempt. The district court awarded approximately $45.5 million
dollars in compensatory damages after finding that defendants
failed to carry out a temporary restraining order mandating that
they call off a “sick out” by the pilot members of the APA.
Defendants contest the evidence and the due process given in the
district court's contempt and damage rulings and also argue that
any award of compensatory damages is inconsistent with the
Railway Labor Act.
FACTUAL HISTORY AND PROCEEDINGS BELOW1
This saga began with American Airlines's (“American”)
acquisition of Reno Air, Inc. in December of 1998. Following the
acquisition, American advised the APA that it intended to operate
Reno Air separately for a transitional period due to legal,
operational and business constraints that prevented instantaneous
integration.2 The APA, which is certified under the Railway
Labor Act3 to represent approximately 9,300 pilots employed by
American, took the position that the newly-affiliated Reno Air
flights should be flown in accordance with the existing
Collective Bargaining Agreement (“CBA”) between American and the
APA. Specifically, the APA argued that American's operation of
Reno Air with pilots not on American's Pilot Seniority List was
in violation of the Recognition and Scope Clause of Section 1 of
the CBA.4 American refused to apply the CBA to the new
1
The factual history of this case is thoroughly reported
in the district court's July 23, 1999 Order. See American
Airlines, Inc. v. Allied Pilots Ass'n, 53 F. Supp. 2d 909, 913-17
(N.D. Texas 1999).
2
This proposed procedure was consistent with American's
acquisition of Air Cal in 1987. Following that acquisition,
American operated Air Cal as a separate carrier for a
transitional period during which American and the APA
successfully negotiated an agreement providing for the
integration of the pilot workforces.
3
45 U.S.C. § 151-88 (1994).
4
Section 1 of the CBA is titled “Recognition and Scope.”
Section 1(C), titled “Scope,” states as follows: “(1) General.
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affiliate. The APA contended that American's operation of Reno
Air outside the CBA constituted a unilateral amendment to the CBA
which, under the RLA, justifies self-help measures such as a
strike or other job action. American took the position that the
CBA did not immediately oblige it to apply its terms to Reno Air
and that because the dispute with the APA involved contract
interpretation,5 it was a “minor” dispute under the RLA, thereby
making unlawful any self-help action by the APA.
American and the APA negotiated for approximately two months
without resolution. On February 5, 1999, a large number of the
APA's pilot members began an unannounced sick-out. This illegal
All flying performed by or on behalf of the Company or an
Affiliate shall be performed by pilots on the American Airlines
Pilots Seniority List in accordance with the terms and conditions
of the agreement.” This language is identical to that contained
in the CBA in place during American's prior acquisition of Cal
Air.
5
Despite American's willingness to do so, the APA failed
to adhere to the CBA with regard to remedies for alleged
violations of the Scope Clause in Section 1. Section 1.L of the
CBA, titled “REMEDIES” provides, verbatim:
(1) The Company and the Association agree to arbitrate
any grievance filed by the other party alleging a
violation of this Section 1 on an expedited basis
directly before the System Board of Adjustment sitting
with a neutral arbitrator. The arbitrator shall be a
member of the National Academy of Arbitrators and
experienced in airline industry disputes. The burden
of proof will be determined by the arbitrator. The
provisions of the Railway Labor Act shall apply to the
resolution of any dispute regarding this Section 1.
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job action6 resulted in an enormous number of flight
cancellations due to lack of crew, which, in turn, cost American
millions of dollars in lost revenues and affected hundreds of
thousands of passengers throughout the country.
The sick-out began on February 6, 1999. From that day until
February 9, 1999, over 1600 flights were canceled because of lack
of crew. On February 10, 1999, American sought relief from the
district court in the form of a Temporary Restraining Order
(“TRO”). At 4:00 p.m. (CST) on February 10 the district court
signed the TRO. The TRO required the defendants and anyone
working for or with them to take “all reasonable steps within
their power” to prevent continuation or encouragement of the
sick-out. The TRO also contained specific requirements: that the
defendants “instruct all pilots to resume their normal working
schedule,” that the defendants notify all APA-represented pilots
by the “most expeditious means possible” of the contents and
meaning of the TRO, that the latter communication contain a
directive “to cease and desist” the sick-out, that the
communication be posted on the APA's web site, that the contents
of the TRO ordering paragraphs be included on all telephone
hotlines held by the APA, that the defendants report by noon on
6
The parties have stipulated that the dispute leading up
to this job action was a minor dispute under the RLA. See
American Airlines, 53 F. Supp. 2d at 917 (“Because it was a
'minor dispute,' Defendants were prohibited by the RLA from
engaging in the sick-out as they did. The sick-out was thus an
illegal job action.”)
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February 12, 1999, the methods used to effect the notice required
by the TRO, and that copies of the notice and reports be
furnished to American.
The district court found that the sick-out actually
increased in size after the TRO was signed. On February 11,
1999, the day after the TRO was signed, over 1200 flights were
canceled. That same day, American sought to hold the defendants
in civil contempt for violating the TRO. After hearing evidence
on American's contempt motion on February 12, 1999, the district
court issued an Order of Contempt7 in which the defendants were
adjudged to be in civil contempt. In addition, a date was set
for a hearing on the issue of compensatory damages for February
17, 1999.
At the February 17, 1999 hearing, American presented
evidence regarding the amount of damages it suffered as a result
of the defendants' contemptuous conduct. The defendants did not
present evidence, but moved for a continuance which the district
granted.
The hearing on damages reconvened on April 12, 1999, and was
further continued until April 15, 1999. At the conclusion of the
hearing, the district court announced its decision from the bench
7
That unpublished order can be found at 1999 WL 66188
(N.D. Tex. Feb. 13, 1999). The district court also made findings
of fact and conclusions of law at this hearing which can be found
at 1999 WL 66168 (N.D. Tex. Feb. 13, 1999). Those findings and
conclusions were adopted in toto in the district court's final
opinion. See American Airlines, 53 F. Supp. 2d at 917 n.44.
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to award $45,507,280.00 in compensatory damages attributable to
the defendants' conduct.
STANDARD OF REVIEW
We review contempt findings and damage awards for contempt
for abuse of discretion. See Martin v. Trinity Indus., Inc., 959
F.2d 45, 46 (5th Cir. 1992); see also Crowe v. Smith, 151 F.3d
217, 226 (5th Cir. 1998) (noting that “review is not perfunctory”
where “a district court's imposition of sanctions under its
inherent power is involved”). The district court's underlying
findings of fact are reviewed for clear error and its underlying
conclusions of law reviewed de novo. See Petroleos Mexicanos v.
Crawford Enterprises, Inc., 826 F.2d 392, 401 (5th Cir. 1987)
(citing Anderson v. City of Bessemer City, 470 U.S. 564, 572
(1985)).
DISCUSSION
I. Liability for Civil Contempt.
A. The District Court's Order.
To support a contempt finding in the context of a TRO, the
order must delineate “definite and specific” mandates that the
defendants violated. See FED. R. CIV. P. 65; Travelhost, Inc. v.
Blandford, 68 F.3d 958, 961 (5th Cir. 1995). “An injunction must
simply be framed so that those enjoined will know what conduct
the court has prohibited.” Meyer v. Brown & Root Const. Co., 661
F.2d 369, 373 (5th Cir. 1981). The district court need not
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anticipate every action to be taken in response to its order, nor
spell out in detail the means in which its order must be
effectuated. See North Alamo Water Supply Corp. v. City of San
Juan, 90 F.3d 910, 917 (5th Cir. 1996) (“Although this order does
not choreograph every step, leap, turn, and bow of the transition
ballet, it specifies the end results expected and allows the
parties the flexibility to accomplish those results.”).
The district court's TRO contained the following provisions:
IT IS ORDERED, that the Defendants, and each of
them, their agents, successors, deputies, servants and
employees, and all persons acting by, in concert with,
through or under them, or by and through their orders,
are hereby temporarily restrained pending a hearing on
the preliminary injunction in this matter:
(a) 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.,
§§ 151-88 (1988).
AND IT IS FURTHER ORDERED:
(b) That the said Defendants and said other
persons acting in concert with them shall
take all reasonable steps within their power
to prevent the aforesaid actions, and to
refrain from continuing the aforesaid actions
if commenced.
(c) That the said Defendants shall instruct all
pilots to resume their normal working
schedule, and provide Plaintiff a copy of all
such instructions.
(d) That APA and the individually named
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Defendants notify, by the most expeditious
means possible, all APA-represented pilots
employed by American of the issuance,
contents and meaning of this Temporary
Restraining Order, and produce a copy of all
such messages to Plaintiff.
(e) That the notice described in (d) above
include a directive from APA to those pilots
who are engaging in a sick-out or other
concerted refusals to fly to cease and desist
all such activity and to cease and desist all
exhortations or communications encouraging
same.
(f) That APA and the individually named
Defendants post the notice described in (d)
above to APA's Internet web site, and provide
a copy of the notice to the Plaintiff.
(g) That APA and the individually named
Defendants include the contents of the
ordering paragraphs of this Order on all
recorded telephone hotlines under control of
Defendants or any of them, until such time as
the Court has acted on Plaintiff's Motion for
a Preliminary Injunction, and provide a copy
of all messages to the Plaintiff.
(h) That APA and the individually named
Defendants report by February 12, 1999, by
sworn affidavit, the methods used to effect
the notice described in (d) above to all APA-
represented pilots.
(I) All copies required to be furnished to the
Plaintiff by Defendants under this Order
shall also be contemporaneously furnished to
the Court.
Defendants argue that all of the specific requirements of
the TRO were met. Our examination of this issue focuses on
whether the general provisions of the TRO were sufficiently clear
in what conduct they mandated and prohibited to support the
contempt finding.
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B. The Defendants' Efforts to Comply with the TRO.
According to the defendants' brief, LaVoy appeared before
television cameras immediately after the TRO was issued saying
that the APA would comply with the district court's order and
asking APA members to return to work. The evening of February
10, LaVoy and Mayhew participated in a conference call with
members of APA's Board of Directors. On this conference call,
Lavoy informed Mayhew and the Board of the TRO, told them that he
would send out a message to members of the APA to begin
compliance with the TRO as soon as possible, and told them that
another conference call would be forthcoming to discuss such
compliance after APA's counsel had an opportunity to review the
TRO. According to the defendants, LaVoy “unequivocally” told the
Board that any pilot fit to fly ought to return to his schedule.
That evening, at 7:30 p.m. (CST), LaVoy recorded a message on the
APA's Information Hotline.8 That message read in pertinent part:
It is important to bear in mind that this order does
not constitute a judgment on the merits of the
contractual dispute and should have no effect on either
side's bargaining power.
Also, please be aware that where the courts [sic] order
refers to “defendants,” it is referring to APA's
National Officers, Board of Directors, Negotiating
Committee and General Counsel.
* * *
The Association will comply with the judge's order and
8
This message was also posted on the APA's web site. See
(visited
July 17, 2000).
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plans to provide you, the membership, with more
specific information about the order as soon as we have
had an opportunity to complete our review.
As we have emphasized throughout this dispute, we
remain focused on negotiating an agreement that is good
for all of the pilots involved in the Reno Air
acquisition. Today's legal maneuvering by management
does not bring us any closer to our goal of a
negotiated settlement.
Following a review by counsel the next morning, LaVoy
recorded a revised Hotline message,9 which repeated the previous
day's statements regarding management's legal maneuvering and
that the TRO was not a judgment on the merits of the contractual
dispute and quoted the full text of the TRO. In addition, the
February 11 (sent at 1 p.m. (CST)) message contained the
following statement immediately after the full quote of the TRO:
That is the complete text of the order. Fellow pilots,
the Allied Pilots Association and its officers do not
authorize, ratify or condone any sick-out or slow down
or violation of the prohibitions in the ORDER. We
further instruct all pilots to resume their normal
working schedule and to otherwise comply with Judge
Kendall's February 10, 1999 order.
A similar statement, along with the text of the TRO, was
distributed to all board and committee members with instructions
to post the message on all domicile bulletin boards, to tell all
pilots to resume their normal working schedules and to convey
that the TRO prohibited a sick-out. In addition, a script for
9
This message was also posted on the APA's web site. See
(visited
July 17, 2000).
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phone bank10 volunteers was drafted.11 This script instructed the
volunteer to read the following statement:
The Allied Pilot's Association and its officers do not
authorize, ratify, or condone any sick out or slow down
or violation of the prohibitions contained in the
ORDER. We further instruct all pilots to resume their
normal working schedule and to other wise comply with
Judge Kendall's February 10, 1999 ORDER.
During the time between the issuance of the TRO (4 p.m.,
February 10, 1999) and late the following morning (February 11,
1999), the number of pilots on the sick list increased. American
moved for a finding of contempt and an award of compensatory
damages against the defendants on the afternoon of February 11.
The district court issued an order requiring the defendants to
show cause at a hearing at 10 a.m. on February 12, 1999, as to
why they should not be held in contempt. The district court also
scheduled a hearing regarding American's prayer for compensatory
damages for February 16, 1999.
At the contempt hearing the district court heard testimony
from an American vice president and from several APA witnesses
called by American. Our review of the record shows that the
questioning and discussion centered on the February 10, 1999,
communications immediately following the issuance of the TRO.
10
The district court found that the Union ran a phone bank
between February 7 and February 10 to call pilots and actively
encourage them to call in sick. See American Airlines, 53 F.
Supp. 2d at 922. This active process of notifying members was
referred to in testimony as a “phone tree.” See id. at n.69.
11
Mayhew assisted in the drafting of this script.
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According to the defendants' brief and our review of the record,
the district court asked the APA's representatives why they did
not initiate a “phone tree”12 and why they did not order APA,
members, specific terms, to clear the sick list immediately and
return to work.
At approximately 4 p.m. (CST), following the February 12,
1999, contempt hearing, LaVoy placed yet another message (along
with the text of the district court's order) on the APA's
Hotline.13
Before delivering the bulk of today’s message, I want
to make a personal plea to all of our pilots: the
Association’s leadership needs your help in complying
with Judge Joe Kendall’s Order. We need to get this
airline back up and running at full capacity, and we
12
Rather than set up the active “phone tree,” the APA had
set up a passive “phone watch” to notify members of the TRO's
requirements. Testimony revealed that a “phone watch” is passive
in the sense that the APA simply has people answering the phone
when members call in for information. See American Airlines, 53
F. Supp. 2d at 922 n.68. The district court commented on this
rather sudden switch in communication format:
The evidence further demonstrates that although a
phone bank (in the form of a “phone tree”) was
operational to cause the sick-out, at the time of the
contempt hearing on February 12, 1999, one has not been
established to call pilots to get them to stop. This
is so even though from the operation of the “phone
watch,” they had both the lines and the manpower to
take this very reasonable action to end this illegal
sick-out and comply with this Court's Order.
American Airlines, 53 F. Supp. 2d at 922 (footnotes omitted).
13
This message was also posted on the APA's web site. See
(visited
July 17, 2000). This message was distributed to the 6,350 pilots
for whom the APA had e-mail addresses.
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need to do so quickly. Please clear the sick list
immediately and resume your normal schedule. Again, APA
is absolutely serious about doing all we can to comply
with the judge’s order, and APA’s entire leadership is
asking for your help in doing so.
* * *
That is the complete text of the order. Fellow pilots,
I repeat, the Allied Pilots Association and its
officers do not authorize, ratify or condone any sick-
out or slow down or violation of the prohibitions in
the order. Again, we further instruct our pilots to
clear the sick list, resume your normal working
schedule and to otherwise comply with Judge Kendall’s
February 10, 1999 order.
In addition, the APA started a “phone tree” and began actively
calling pilots and telling them to clear the sick list and return
to work.
C. Civil Contempt.
“A movant in a civil contempt proceeding bears the burden of
establishing by clear and convincing evidence: 1) that a court
order was in effect, 2) that the order required certain conduct
by the respondent, and 3) that the respondent failed to comply
with the court's order.” Martin v. Trinity Indus., Inc., 959
F.2d 45, 47 (5th Cir. 1992) (quoting Petroleos, 826 F.2d at 401).
The contemptuous actions need not be willful so long as the
contemnor actually failed to comply with the court's order. See
N.L.R.B. v. Trailways, Inc., 729 F.2d 1013, 1017 (5th Cir. 1984).
D. Union and Individual Liability.
A union can be held in contempt “if the strike was conducted
or encouraged by its members functioning as a union, by its
agents acting within their apparent authority, or by those whose
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acts the union can be held to have ratified by its inaction.”
Black Diamond Coal Mining Co. v. Local Union 8460, 597 F.2d 494,
495 (5th Cir. 1979). “Ratification occurs where the union's
efforts to return strikers are so minimal that the union's
approval or encouragement may be inferred.” United States Steel
Corp., 598 F.2d at 365; see also Black Diamond Mining, 597 F.2d
495 (“[T]he circumstances surrounding the strike may create an
inference that the Union condones or ratifies the illegal
activity and the Union will be held responsible by its failure to
take measures to end the strike.”). We find that the district
court did not abuse its discretion in concluding that the APA
ratified the illegal job action, and therefore, was in contempt
of the TRO.
The conduct of LaVoy and Mayhew failed to bring the APA into
compliance with the TRO.14 They are therefore responsible for
the APA's disobedience of the TRO. As executive officers of the
APA, LaVoy and Mayhew are subject to contempt charges for their
failure to cause the APA to comply with the district court's
order. See Wilson v. United States, 221 U.S. 361, 376-77 (1911);
see also N.L.R.B. v. Maine Caterers, Inc., 732 F.2d 689, 691 (1st
Cir. 1984) (“[A]n officer, responsible for the corporation's
14
It is important for us to note that we are not setting
up an unreasonable standard for future labor litigants. LaVoy
and Mayhew are not being held responsible for their failure to
get the workers back to work, but for their failure to use their
best efforts to effectuate the APA's compliance with the TRO.
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efforts and for its disobedience, may be held in contempt.”).
The district court's conclusion that LaVoy and Mayhew are subject
to contempt charges for their acts (or omissions) in this illegal
job action was not in error.
E. The Defendants Violated the TRO.
The district court found that the defendants' February 10,
1999, communication violated sections (a) thru (g) of the TRO.
See American Airlines, 53 F. Supp. 2d at 917-23. The district
court's factual findings with regard to defendants' efforts to
comply with the TRO on February 10, 1999, are not clearly
erroneous. The district court also found that the appellants'
February 11, 1999, communication violated sections (a), (b), (d),
(e) and (f) of the TRO. The district court's factual findings
with regard to appellants' efforts to comply with the TRO on
February 11, 1999, are not clearly erroneous. For the reasons
that follow, we find that the district court did not abuse its
discretion in finding the defendants in civil contempt for
violating the TRO.
1. The TRO's “all reasonable steps” requirement.
Section (b) of the TRO clearly required the APA to “take all
reasonable steps” to end or prevent the sick-out. Our review of
the district court's order and the record lead us to conclude
that is was not clearly erroneous for the district court to hold
that this portion of the TRO, inter alia, was not satisfied until
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4 p.m. (CST) on February 12, 1999. We agree with the district
court's finding that the February 10 communication did not purge
the defendants of contempt due to the fact that the communication
was
so lacking in authoritative forcefulness that [it]
either [was] not heard at all . . . or [was] discounted
as being merely stage lines parroted for the benefit of
some later judicial review.
United States Steel v. United Mine Workers of America, 598 F.2d
363, 366 (5th Cir. 1979), quoted at American Airlines, 53 F.
Supp. 2d at 921-22.
The district court's finding that the February 11
communication also failed to satisfy the “all reasonable steps”
portion of the TRO is also not clearly erroneous. Like the
February 10 communication, the February 11 communication was a
minimalist, non-authoritative directive that was merely
accompanied by a verbatim quotation of the TRO.
The district court's conclusions that the February 10 and 11
communications did not constitute “all reasonable steps” by the
APA are bolstered by additional documents in the record prior to
the district court's issuance of the TRO on February 10, 1999.15
This evidence is a series of e-mails showing that APA
representatives forewarned pilot members that a federal
15
The printouts of the e-mails were attached to American's
“Memorandum in Support of Plaintiff's Motion for a Temporary
Restraining Order and Injunctive Relief,” filed with the district
court on February 9, 1999.
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injunction may be forthcoming, but that the pilots should not
feel compelled to return to work immediately. The final
transmission, dated February 5, 1999, was written by Los Angeles
APA Chairman Denny Breslin and contained the following
statements:
This is the time of the year when colds, flu and
viruses abound. In addition to the normal health
concerns, the stress and distraction due to our current
contract dispute appears to be taking its toll. As an
organization dedicated to safety, we cannot tolerate
any degradation of safety within our cockpits.
* * *
Captains, please make every effort to ensure that your
crew is not emotionally distracted in any way. Please
don't engage in discussion in the cockpit that could
cause a safety hazard. If you decide that you are
unfit to fly your next trip, and MOST pilots probably
are, then you should contact crew schedule immediately
to let them know you are SICK. You are not required to
state the nature of your illness, and do not allow
yourself to be dragged into a discussion about it.
* * *
Our intention is to vigorously defend any pilots' [sic]
right to use their sick leave appropriately.
It is possible that a Federal Judge will enjoin the APA
from an alleged illegal job action. If that happens it
does NOT mean that you, as an individual, may return to
work if you still feel too stressed to perform safely
in the cockpit. Remember the FAA has given YOU the
final determination whether or not you are fit for
flying duty.
This evidence, in front of the district court prior to its
issuance of the TRO, strongly supports the district court's
finding that the communications of February 10 and 11 did not
constitute “all reasonable steps” to prevent or otherwise stop
the sick-out. Indeed, it strongly implies that the intention of
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the APA and its leaders16 from the outset was to instigate the
very illegal job action that took place.
2. The TRO's “cease and desist” requirement.
Section (e) of the TRO required the APA to issue “cease and
desist” directives to pilots engaging in the sick-out. A plain
reading of the February 10 and 11 communications shows that
neither communication contained a direction to stop the sick-out.
The February 11 addition to the communication that the “pilots
resume their normal working schedules” is “so lacking in
authoritative forcefulness” that it did little if anything to
halt the sick-out. As stated above, the number of APA pilots on
the sick list actually increased in size on February 11.
3. Defendants did not Purge Themselves of Contempt
Until February 12.
We find that the district court's conclusion that defendants
failed to purge themselves of contempt via the February 10 and 11
communications was not clearly erroneous. Significant evidence
from our review of the record shows that it was not until
February 12, 1999, at 8 p.m. (CST), that LaVoy finally took
action, on behalf of the APA, sufficient to purge the defendants
16
Although there was originally some question as to
whether the Union formally organized the sick-out, counsel for
defendants later admitted that they had a hand in organizing the
illegal work action. See American Airlines, 53 F. Supp. 2d at
922 n.71 (describing as “troubling” this “complete 180 degree
turn from what had earlier been stated to the Court on the record
in open court by LaVoy and defendants' counsel”).
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of contempt.
F. Due Process and the District Court's
Contempt Proceedings.
Defendants argue that they were entitled to more process
than they received during the contempt phase of this proceeding.
As primary authority for this assertion, the defendants assert
that the standard applied in International Union, UMWA v.
Bagwell, 512 U.S. 821 (1994), should apply in the situation sub
judice. We decline the invitation to apply the principle
enunciated in Bagwell to civil contempt situations.
Contempt proceedings are naturally “summary in form and
swift in execution.” Ryals v. United States, 69 F.2d 946, 947
(5th Cir. 1934). The defendants' argument that they are entitled
to what amounts to a full trial on the merits of their contempt
charge is contrary to case law. See, e.g., Placid Refining Co.
v. Terrebonne Fuel & Lube, 108 F.3d 609, 613-14 (5th Cir. 1997)
(holding that civil contempt proceeding that gave “notice and an
opportunity to be heard” was constitutional), accord Alberti v.
Klevenhagen, 46 F.3d 1347, 1359 (5th Cir. 1995).
The defendants had adequate notice of the contemptuous acts
or omissions alleged by American. American's Motion for Contempt
asked the district court to hold the defendants in contempt
because (1) the sick list increased in number after the issuance
of the TRO; (2) the messages on the Hotline and the Internet were
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not in compliance with the TRO's mandates; and (3) the defendants
did not take “all reasonable steps within their power to” prevent
continuation of the sick-out.
We find that the allegations in American's Motion for
Contempt provided the defendants adequate notice to inform them
of the nature of the charges and to enable them to prepare a
defense. “Simple notice is all that is required.” United States
v. Powers, 629 F.2d 619, 625 (9th Cir. 1980). Couple this with
the district court's Show Cause Order17 and the record shows that
defendants were provided with all the notice necessary under the
Due Process Clause.
Defendants also argue that the district court's decision to
allow American to expand the record after the February 12 hearing
without giving defendants an opportunity to confront this new
evidence violated their right to due process. As noted in our
discussion of the defendants' violations of the TRO, the February
10 and 11 communications along with the series of e-mails
forewarning the pilot members of impending court action (all of
which were in front of the district court prior to its issuance
of the TRO) provide sufficient evidence that the defendants'
17
The district court's “Order to Show Cause” advised the
defendants to appear on February 12 and “show cause, if any there
be, why they should not be adjudged in civil contempt of this
Court, and why the Court should not impose fines on Defendant APA
and individual named Defendants, as prayed in the Motion of
Plaintiff.”
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actions did not comply with the spirit or letter of the TRO.
Therefore, any discussion of the post-February 12 evidence is
unnecessary and moot.
II. “Compensatory Damages” for Civil Contempt.
A. “Compensatory Damages” Under the RLA vs. “Compensatory
Damages” for Violation of a Court Order.
In this circuit, American may not recover from the APA or
its representatives under the RLA for damages caused by illegal
strikes due to “minor disputes.” See Burlington Northern Rail.
Co. v. Brotherhood of Maintenance of Way Employees, 961 F.2d 86,
88 (5th Cir. 1992) (Wisdom, J.); Louisville & Nashville Rail. Co.
v. Brown, 252 F.2d 149, 154-55 (5th Cir. 1958). The analysis in
Brown focused on the fact that Congress did not specifically note
in the RLA that damage remedies were available. See 252 F.2d at
155. Importantly, this analysis did not hold that district
courts were stripped of their contempt remedies by the RLA.
There is a difference between a damage action by an employer
for harm resulting from an illegal strike and a compensatory
sanction issued by a court for disobedience of its mandates.18
With the compensatory sanction, the end result is largely the
same as an action for damages--the employer is compensated. See,
18
This point was also not lost on the district court.
See, e.g., American Airlines, 53 F. Supp. 2d at 941 n.182 (“The
money is not being ordered paid because of the illegal work
stoppage, but for the damages caused by not ending it when
ordered to do so by a federal court.”).
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e.g., Chandler v. James, 180 F.3d 1254, 1270 (11th Cir. 1999)
(“Compensatory sanctions merely imitate the relief that would be
provided in a damages action.”). However, the justification for
the sanction is different than that for the damage action. The
district court recognized this distinction in its articulation of
the controversy in this case:
The basic controversy in this case is whether the APA
was engaged in an illegal job action under the RLA and
whether they should be ordered to stop via a TRO and
Injunction after a hearing. The basic controversy was
resolved in favor of American when the Court found and
the APA stipulated that this was a “minor dispute”
under the RLA, thus making the APA instigated sick-out
an illegal job action under the RLA. Furthermore, the
parties have now asked the Court to enter an agreed
injunction. If the TRO had been obeyed, the APA would
not owe a dime because damages are not available under
the RLA. But the Defendants are liable for damages
because of their contemptuous acts of not obeying and
ending the illegal sick-out when ordered.
American Airlines, 53 F. Supp. 2d at 939-40. In short, the
sanction was issued in this case to compensate American for the
damages caused by the defendants' violation of the TRO, not a
violation of the RLA.
“Judicial sanctions in civil contempt proceedings, may in a
proper case, be employed for either or both of two purposes: to
coerce the defendant into compliance with the court's order, and
to compensate the complainant for losses sustained.” United
States v. United Mine Workers of America, 330 U.S. 258, 303-04
(1947); see also Norman Bridge Drug Co. v. Banner, 529 F.2d 822,
827 (5th Cir. 1976) (“Compensatory civil contempt reimburses the
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injured party for the losses and expenses incurred because of his
adversary's noncompliance.”), accord Travelhost, 68 F.3d at 961-
61; Petroleos, 826 F.2d at 400. Because the contempt sanction in
this case was ordered to compensate American for lost revenue
resulting from the defendants' contemptuous conduct, it is
clearly compensatory in nature.19
The district court “has broad discretion in the assessment
of damages in a civil contempt proceeding.” Long Island Rail.
Co. v. Brotherhood of Rail. Trainmen, 298 F. Supp. 1347, 1347
(E.D.N.Y. 1969). “The purpose is to compensate for the damages
sustained. The public rights that the said court orders sought
to protect are important measures of the remedy.” Id. (citing
McComb v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949)). In
this case the sanction issued by the district court sought to
protect the sanctity of judicial decrees and the legal process.
See McComb, 336 U.S. at 193 (“The measure of the court's power in
civil contempt proceedings is determined by the requirements of
full remedial relief.”). “In our complex society, there is a
great variety of limited loyalties, but the overriding loyalty of
all is to our country and to the institutions under which a
19
In its April 12, 1999, hearing on compensatory damages,
the district court was emphatic in using the civil contempt
terminology and in proclaiming that any damages paid by the APA
were going directly to American. “While the district court's
characterization is certainly not controlling, it can be
considered.” Petroleos, 826 F.2d at 399 n.11 (citations
omitted).
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particular interest may be pursued.” United Mine Workers, 330
U.S. at 306. The district court did not abuse its discretion in
deciding to award American compensatory damages for the injuries
caused by the defendants' civil contempt.
B. Due Process and “Compensatory Damage” Proceedings.
Our review of the record in this case demonstrates that the
issue of damages is indeed a complex one. Given the fact that
the damages are not susceptible to simple quantification, we must
ensure that careful procedures were used to ascertain the amount
appropriate to compensate American and to vindicate the district
court's authority to demand adherence to its orders. We find
that the district court did not abuse its discretion during the
damage phase of its contempt proceeding as it addressed the issue
with adequate procedural vigilance.20
At the February 17, 1999, hearing, American presented its
case-in-chief which relied heavily on expert testimony. The
defendants were allowed to cross examine the experts, but were
not given advance notice of the experts' reports or allowed to
depose the experts. When American was finished presenting its
case, the defendants requested a continuance to develop their
defense. The district court granted the defendants' request and
20
Consistent with our due process analysis with respect to
the liability phase of the civil contempt proceeding, we decline
to adopt a procedural requirement in civil contempt sanction
hearings akin to that set forth in Bagwell.
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continued the damages phase of its contempt hearing until mid-
April. At this subsequent hearing, defendants were again allowed
to cross examine the plaintiff's experts and were allowed to
present their other evidence. The extension of time allowed the
defendants more than adequate time to develop their arguments
regarding the damages caused by their conduct.
The defendants' brief discusses at length only one specific
example of how the district court purportedly violated their due
process rights in the damages hearing: the so-called “truncated
discovery process.” The manner in which the district court
tailored the discovery to the particular demands of the damages
phase of this case was well within its discretion in this
particular case. See, e.g., Munoz v. Orr, 200 F.3d 291, 305 (5th
Cir. 2000). In our view, defendants have not demonstrated how
additional discovery would shed any significant amount of light
on the issue.
Our review of the record reveals no evidence of inadequate
due process during the damage phase of this trial. The
procedural framework set up by the district court was sufficient
for all parties to develop their respective damage cases. Both
sides presented complex damage models that involved expert
testimony and industry document analysis. Based on the testimony
of American's damage experts, inter alia, the district court
determined that American's overall loss caused by the work
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stoppage were somewhere between $200 to $250 million.21 The
basis of the district court's compensatory damage award was the
actual damages suffered during the two days the APA was in
contempt. This amount, approximately $51 million, was reduced
another 11 percent for the margin of error in American's revenue
estimation and “booking away” that may have occurred.22 Any
additional time and proceedings would serve to prolong this
unfortunate incident and would not benefit anyone.
The district court's decision to continue the damages
hearing and tailor the discovery process in the manner it chose
was not an abuse of discretion.
CONCLUSION
For the aforementioned reasons, we AFFIRM the district
court's ruling on the defendants' liability for civil contempt.
We also AFFIRM the district court's determination of damages for
21
The district court ultimately found the testimony of
APA's damage model experts contradictory, see American Airlines,
53 F. Supp. 2d at 935 (finding that the two APA experts differed
with each other on the harm suffered by American by a factor of
six and differed on the amount of damages for the two days by a
factor of two), and unreliable. See id. (finding the assumptions
that formed the basis for their calculations were “inconsistent
with the obligations imposed on Contemnors by the TRO and the
reality of the pilots' actions as evidenced by their conduct once
they were directed to return to work on February 12”). These
findings by the district court are not clearly erroneous.
22
Booking away is a phenomenon that occurs when passengers
become aware of the fact that there is some sort of job action
going on at American, then those whose tickets permit them the
flexibility to change their reservations, change them to another
airline because of potential disruption of service at American.
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that civil contempt.
AFFIRMED.
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