ARB CASE NO. 04-124
ALJ CASE NO. 2004-AIR-16
2004-AIR-17
DATE: September 28, 2007
In the Matter of:
CRAIG S. FRIDAY,
COMPLAINANT,
v.
NORTHWEST AIRLINES, INC.,
RESPONDENT.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For the Complainant:
James A. Gauthier, Esq., Kent, Washington
For the Respondent:
Timothy R. Thornton, Esq., Elizabeth M. Brama, Esq., Briggs and Morgan, P.A.,Minneapolis, Minnesota
FINAL DECISION AND ORDER OF DISMISSAL
Craig S. Friday filed
complaints with the United States Department of Labor alleging that his
employer, Northwest Airlines, Inc., subjected him to various adverse actions in
violation of the employee protection provisions of the Wendell H. Ford Aviation
Investment and Reform Act for the 21st Century (AIR 21).[1]
Northwest filed a Motion for Summary Judgment (Motion), seeking dismissal of
the complaints. A
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Department of Labor Administrative Law Judge (ALJ) granted
Northwest’s Motion and recommended that all of the allegations contained in
Friday’s complaints be dismissed.
On September 14,
2005, Northwest filed a Chapter 11 petition for bankruptcy protection in the
Southern District of New York.[2]
On January 31, 2007, the Board issued an order staying proceedings in this case
pursuant to the Bankruptcy Code’s automatic stay provision.[3]
On May 31, 2007, Northwest
completed its reorganization.
On September 7, 2007, the Board issued an Order to Show Cause why the Board
should not proceed to rule on this case. Both parties have now responded to
the Order to Show Cause.
Northwest contends
that the Bankruptcy Court’s Confirmation Order discharges and releases Northwest
from Friday’s AIR 21 claims. Northwest relies on sections 524 and 1141 of the
Bankruptcy Code and the terms of the Confirmation Order and Reorganization Plan.
In his response to
the Show Cause Order Friday does not directly address the effect of the
Bankruptcy Court’s discharge. The only arguably relevant argument he raises is
his unsupported assertion that the Bankruptcy Court “ruled that [his] claims in
the Bankruptcy Court are matters governed by the collective bargaining
agreement” and that the bankruptcy judge “further ordered that Friday could
file suit to compel Northwest to arbitrate his grievances.”[5]
Section 1141(d)(1)
defines the effect of confirmation of a Chapter 11 reorganization plan as
follows:
Except as otherwise
provided in this subsection, in the plan, or in the order confirming the plan,
the confirmation of a plan—
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(A) discharges the
debtor from any debt that arose before the date of such confirmation . . .
whether or not—
(i) a proof of the
claim based on such debt is filed or deemed filed under section 501 of this
title;
(ii) such claim is
allowed under section 502 of this title; or
(iii) the holder
of such claim has accepted the plan . . . .[[6]]
Section 524(a)
provides that a discharge “operates as an injunction against the commencement
or continuation of an action, the employment of process, or an act, to collect,
recover, or offset any debt” that is discharged under the plan. 11 U.S.C.A. §
524(a).
The Confirmation
Order provides that:
Pursuant to Section
11.2 of the [Reorganization] Plan, except as provided in the [Reorganization]
Plan, on the Effective Date, all existing Equity Interests in NWA Corp. and
Claims against the Debtors, including Intercompany Claims, shall be, and shall
be deemed to be, satisfied, discharged and terminated, and all holders of
Equity Interests in NWA Corp. and Claims against any of the Debtors shall be
precluded and enjoined from asserting against the Reorganized Debtors, or any
of their assets or properties, any other or further Equity interests in NWA
Corp. or Claim against any of the Debtors based upon any act or omission,
transaction or other activity of any kind or nature that occurred prior to the
Effective Date.[[7]]
The “Effective Date”
cited in the Confirmation Order is May 31, 2007,[8]
and Friday’s AIR 21 complaints are “claims” that arose prior to the Effective
Date. Although Friday contends that the Bankruptcy Court ruled that his claims
are exempt from the bankruptcy discharge, he has not submitted any documents in
support of his contention, nor does he cite to or identify any document
establishing such a ruling. In addition,
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Friday has not demonstrated how a
ruling that he may file suit to compel Northwest to arbitrate his grievances
removes his AIR 21 complaints from the protection of the bankruptcy discharge.
Therefore, we
conclude that Friday has failed to show that we should deviate from the
relevant statutory text and bankruptcy court orders, and we further conclude that
any liability Northwest had for Friday’s AIR 21 complaints was discharged in
the bankruptcy proceeding.[9]
For this reason, we lift our stay of these proceedings and DISMISS
Friday’s complaints.
SO ORDERED.
OLIVER M. TRANSUE
Administrative Appeals Judge
A. LOUISE OLIVER
Administrative Appeals Judge
[1] 49 U.S.C.A. § 42121(a) (West
2003). AIR 21’s implementing regulations are found at 29 C.F.R. Part 1979 (2007).
[2] In re: Northwest Airlines Corp., et. al,
Case No. 05-17930 (ALG).
[3] 11 U.S.C.A. § 362(a)(1) (West Supp. 2003).
[4] See Findings of Fact, Conclusions of
Law, and Order Under 11 U.S.C. § 1129(a) and (b) and Fed.R.Bankr.P. 3020
Confirming Debtors’ First Amended Joint and Consolidated Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code (Confirmation Order) and Debtors’ First
Amended Joint and Consolidated Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code (Reorganization Plan).
[5] “Appeal Brief of Craig Friday,” submitted
to the Board on September 24, 2007 in response to the Order to Show Cause.
[6] “Debt” means “liability on a claim.” 11
U.S.C.A. § 101(12). “Claim” means the right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured.” 11 U.S.C.A. § 101(5).
[7] Confirmation Order at 34.
[8] Notice of (I) Entry of Order Confirming
Debtors’ First Amended Joint and Consolidated Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code; and (II) Occurrence of Effective Date at
1-2.
[9] See, e.g., Davis v. United Airlines,
ARB No. 02-105, ALJ No. 2001-AIR-5, slip op. at 3 (ARB Apr. 26, 2006) (citing
§§ 524(a) and 1141(d) of the Bankruptcy Code); Toland v. PST Vans, Inc.,
1993-STA-29, slip op. at 2 (Sec’y Sept. 7, 1994) (same).
