The Boeing Company has asked the Texas Supreme Court to reconsider a decision that cleared the way for Southwest Airlines Pilots Association, a 9,000-member labor union, to proceed with a lawsuit alleging the company cost it millions of dollars via its false representations about the airworthiness of the 737 MAX aircraft.
In May, the Texas Supreme Court denied review in the case, allowing a Mach 2022 ruling from the Fifth Court of Appeals in Dallas to stand. That ruling revived the lawsuit, but Boeing argued in its motion for rehearing filed Wednesday that it also “makes Texas a national outlier on conflict preemption under the federal Railway Labor Act.”
The preemption argument was central to the petition for review Boeing lodged in October 2022. In response, the union argued in part that because Boeing isn’t an airline carrier, the RLA doesn’t apply to the state law tort claims in dispute.
Resolving the claims of the union, Boeing argues in the motion for rehearing, will require interpreting the current and former collective bargaining agreements between the airline and its pilots, which means this lawsuit is preempted.
“The bottom line is that courts across the country are aligned on the test for RLA and [Labor Management Relations Act] preemption: If the claim requires CBA interpretation, it is preempted — no matter the parties involved,” Boeing told the court. “Instead, Texas has a new test for RLA preemption: Is the claim ‘between a carrier by air and its employees’? If the answer is no, CBA-related claims brought by or against third parties can now proceed in this state.”
The Fifth Court of Appeals determined that because this dispute isn’t between “a carrier and its employees,” the RLA doesn’t apply.
“Absent support from the statutory text or other controlling authority, we cannot conclude that the state law claims between the parties here are within the purview of the RLA,” Justice Dennise Garcia wrote for the panel. “Accordingly, the claims are not preempted. To conclude otherwise would judicially legislate expansion of the RLA far beyond the purpose Congress sought to advance.”
In the motion for rehearing, Boeing told the court that the Second, Fourth, Sixth, Seventh, Eighth and Ninth Circuits have all concluded that the RLA or LMRA preempts any claims requiring CBA interpretation, “even when the claim is not between a carrier and its employees.”
Boeing also said that the Second, Fourth, Fifth, Sixth, Seven and Ninth Circuits have all determined the RLA preempts a claim “against a third-party to the CBA.” Boeing explained in a footnote that the Fifth Circuit ruling (in Kaufman v. Allied Pilots Association) held that RLA preemption extends to “all types of state regulation that conflicts with federal labor relations law … , whether in litigation between parties to the labor relationship or between downstream injured persons and parties to the labor relationship.”
“A simple syllogism would resolve this case anywhere else in the country: (1) the RLA preempts all claims that require CBA interpretation; (2) SWAPA’s claims require CBA interpretation; and so (3) SWAPA’s claims are preempted by the RLA,” Boeing argued. “The Dallas Court of Appeals charted a different, novel course. It reasoned that RLA preemption turns not on whether the dispute involves CBA interpretation, but instead on whether it involves particular parties (namely, those subject to the RLA’s arbitral scheme). This makes Texas an outlier.”
Boeing warned of wide-ranging implications should the lower court’s ruling stand, arguing nothing would stop truck drivers from suing automakers “for recalls that affect their CBA-negotiated wages” and that airline employees could bring suit against “a third-party caterer that the airline hired to replace their in-house catering jobs” absent court intervention here.
Dallas County District Judge Aiesha Redmond had tossed the suit with prejudice after determining that SWAPA didn’t have standing to bring the claims. The Fifth Court of Appeals reversed that ruling, explaining that while SWAPA had standing to assert claims on its own behalf, at the time it filed suit against Boeing it didn’t have standing to assert claims on behalf of its members.
“Although SWAPA’s subsequently acquired assignments of member interests do not cure the jurisdictional defects in the present case, the assignments might confer standing on SWAPA to file suit in the future,” the Dallas appellate panel wrote. “Thus, while the trial court properly dismissed the suit without providing SWAPA an opportunity to amend its pleadings, the dismissal should have been without prejudice.”
The Fifth Court of Appeals in July 2022 had denied Boeing’s request for rehearing en banc. Justice David J. Schenck dissented from that decision, writing that “allowing the claim to proceed against the third party to judgment on issues that would overlap with the carrier’s own claims creates the obvious prospect of inconsistent readings of the CBA and the same operative facts.”
“And, while the issues may overlap, the parties would not. Thus, if SWAPA were unsuccessful in its claims against Boeing — that, as all agree, must involve the interpretation of a CBA — then Southwest Airlines would be to free to raise the same or similar claims against Boeing in hopes of obtaining exactly the opposite result despite the objectives of [RLA] section 151a.”
Boeing is represented by Nina Cortell and Christopher Knight of Haynes Boone, Anne M. Johnson and Kelli Bills of Tillotson Johnson & Patton, Craig S. Primis and Ronald K. Anguas Jr. of Kirkland & Ellis and E. Leon Carter and Courtney Barksdale Perez of Carter Arnett.
The SWAPA is represented by David S. Coale and Jamie R. Drillette of Lynn Pinker Hurst & Schwegmann, Jeffrey W. Hellberg Jr. of Wick Phillips Gould & Martin and Anthony U. Battista and Mary Dow of Condon & Forsyth. The case number is 22-0631.