Judge makes clear: 2003 is not relevant – 5.21.12

Judge makes clear: 2003 is not relevant in bankruptcy case

ByTerry Maxon/Reporter
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12:28 PM on Mon., May. 21, 2012 |
American Airlines employees took a battering in 2003 when the airline secured major concessions from the unions and non-unionized employees, and the unions have brought up those employee sacrifices in bankruptcy court.

However, U.S. Bankruptcy Judge Sean Lane has made clear that what happened then doesn’t affect American’s current efforts to reject its labor contracts or the unions’ efforts to fight American’s motion.

Once again on Monday, Judge Lane interrupted testimony to point out that 2003 has historical significance, but no relevance to what is happening in the American bankruptcy case or American’s current motion under Section 1113 of the bankruptcy code to reject the labor contracts.

"I’m having trouble again understanding why we’re getting into this level of detail," Judge Lane told TWU counsel Paul Kizel as Kizel was questioning Don Videtich, a TWU international representative, about TWU’s experience at American since 2001.

The judge wondered why the question of Videtich covered events in 2001, 2003, 2009 and 2011. "I’m trying to figure out the relevance before we go down a rabbit hole," Judge Lane said.

The judge had used the rabbit-hole reference last Thursday as Association of Professional Flight Attendants counsel Rob Clayman was trying to illustrate the sacrifices that flight attendants had made compared to other stakeholders like creditors.

"So you’re asking me as a legal matter that in my 1113 analysis I have to go back to 2003 when measuring the sacrifice and how it should be shared equally? If that’s your argument, I explicitly reject it," the judge told Clayman.

Clayman made a fresh effort to convince the judge that he should consider the relative sacrifices given up by employees – a lot – and that of creditors – little or nothing – as the judge considered whether American was treating employees fairly and equitably.

But the judge reiterated that he’s not going to go back to 2003 as he looks at the case:

"I think that’s the same argument you just made because you’re asking me by using the words give up, you’re asking me to use 2003 as the baseline and you’re asking me then historically go back and look at all stakeholders from 2003.
"And I understand what I have is the bankruptcy. … I’m not saying that 2003 is not relevant historically speaking, as a general matter. But what I’m saying is when you begin to provide deltas of here’s what our numbers are, here’s where our sacrifices are and begin to make that explicit argument, I just think it’s untenable. I don’t think it’s what I’m supposed to be doing.

"I don’t know anything in the case law where I’m asked to look at that delta going back almost a decade and how I’m supposed to figure that out, and how that would be any different than in analyzing the industry standard going back more than a decade, what were they doing at United, what were they doing at Delta, what were they doing at Northwest."

After complimenting the parties for pretty much staying on track, Judge Lane added: "What I’m trying to do is not give people false hope about what I want to be hearing about, what really the case is before. And since we went down this rabbit hole today, I’m just telling you I do not believe that 2003 is an appropriate baseline."