Joined: Mon Aug 16, 2010 1:56 pm
As a new-hire, I've heard about this lawsuit, but really don't know anything about it. Why were the AO pilots suing AC/ACPA?
In 1991, Air Canada acquired Air Ontario, a regional airline. At the time, the pilots of Air Canada and the pilots of Air Ontario were all members of Canadian Air Line Pilots Association ("CALPA"), a trade union. The President of CALPA declared a "merger" of the two employer airlines. This declaration precipitated a dispute between the pilots of Air Canada and the pilots of Air Ontario about the preparation of an integrated seniority list.
Arbitration took place, and Arbitrator Michel Picher released his decision on March 28, 1995 (the "Picher Award"). The Picher Award provided that the least senior 15% of the Air Canada pilots would be ranked with the most senior 15% of the Air Ontario pilots and the remaining Air Ontario pilots would then follow in ranking.
The Representative Plaintiffs allege that the defendant Chris Pulley, who was the chairperson of the Air Canada pilots’ Master Executive Council (“MEC”), took the position that the Picher Award was unacceptable to the Air Canada pilots.
The Plaintiffs Class is comprised of 171 Air Ontario pilots. The Plaintiffs are represented by the Representative Plaintiffs Patrick Berry, James Deluce, Jeffrey Karelsen, Robert James Simerson, and Ernest Zurkan.
The Plaintiffs Class Members are now members of Air Line Pilots Association (“ALPA”), which succeeded CALPA in 1997. ALPA has been joined as a Third Party that is nominally represented by Kent Hardisty. Mr. Hardisty has filed a defence in the main action.
The Representative Plaintiffs allege that 1,269 Air Canada pilots signed a "notarized Pilot Solidarity document" that rejected the Picher Award, and they allege that some Air Canada Local Councils passed resolutions rejecting the Picher Award. The Representative Plaintiffs allege that 136 Air Canada pilots wrote to the CALPA President urging rejection of the Picher Award and it is alleged that representatives of the Air Canada Special MEC Advisory Committee ("SMMAC") advised Air Canada that the Picher Award was not supported by the vast majority of the Air Canada pilots.
The Representative Plaintiffs allege that Mr. Pulley, as directed by the Air Canada MEC, refused to complete the "integrated seniority list" contemplated by the Picher Award. They allege that Mr. Pulley and the Air Canada MEC prevented good faith negotiations in respect of a new Air Canada collective agreement so as to accord with the dictates of the Picher Award.
In November 1995, the Air Canada pilots quit CALPA, and they chose the Air Canada Pilots Association ("ACPA") as their exclusive bargaining agent. ACPA was certified as their bargaining agent on November 14, 1995, and as of that date Air Canada pilots were no longer considered members of CALPA.
About two years later, on November 4, 1997, Mr. Berry commenced a proposed class action against the Air Canada pilots. The action was unique because Mr. Berry sought to be named Representative Plaintiff and he also sought the appointment of Representative Defendants.
Advancing the tort claims of conspiracy, intentional interference with economic interests, breach of fiduciary duty, and negligent misrepresentation and a breach of fiduciary duty claim, the former Air Ontario pilots claim damages of $300 million from the defendant subclasses of Air Canada pilots.
The Plaintiffs’ expert’s report calculates the damages to be in the range of $137-$172 million depending on the discount rate.
In the Third Party action, the Defendants seek indemnification from ALPA.
For what follows, it will be informative to note that assuming ALPA does not indemnify the individual Defendant Class Members, then their per capita share of liability is between $80,000 to $100,000.
On March 13, 2001, Justice Cumming granted the certification motion. See Berry v. Pulley,  O.J. No. 911 (S.C.J.). Justice Cumming certified a plaintiff’s class and also seven defendant subclasses. The certification order specified an opt-out date that has long passed.
Justice Cullity appreciated that the Air Canada pilots’ participation in the alleged wrongdoing was diverse. Different groups of Air Canada pilots had different defences due to varying factual situations and participation in the alleged wrongdoing.
On the motion of the Representative Plaintiffs, Justice Cumming decided to divide the 1,682 pilots employed by Air Canada into seven subclasses and to appoint Representative Defendants. The first five subclasses are small and are comprised of Air Canada pilots who occupied union offices. The rank and file Air Canada pilots are in the last two subclasses, which are large classes. Over 1,600 Air Canada pilots are in subclasses six and seven.
The seven subclasses are as follows:
• Subclass 1: The defendants who were members of the Air Canada MEC between March 28, 1995 and November 14, 1995. The Representative Defendants are Tom Fraser and Peter Wallace.
• Subclass 2: The merger representatives of the Air Canada Pilots. The Representative Defendant Howard Malone was a merger representative of the Air Canada pilots together with the defendant Chris Pulley.
• Subclass 3: The defendants who were members of SMMAC. The Representative defendant Gary Dean was the chairman of SMMAC and a former chairman of the Air Canada MEC. The Representative Defendant Yves Filion was a member of SMMAC.
• Subclass 4: The defendants who were members of the Negotiating Committee of Air Canada pilots. The Representative Defendants are Denis Belhumeur and Greg Mutchler.
• Subclass 5: The defendants who were members of the Local Executive Councils of Local Councils 1, 7, 11 and 14 of Air Canada pilots. The Representative Defendant is George Cockburn.
• Subclass 6: The defendants who did not hold positions on the Air Canada MEC, Local Executive Councils, the Negotiating Committee of Air Canada pilots, the SMMAC or a position as a merger representative, but who allegedly acted to prevent implementation of the Picher Award by communicating directly or indirectly with representatives of Local Executive Councils, the Air Canada MEC, the Negotiating Committee or merger representatives to encourage or direct them to reject the Picher Award, to refuse to negotiate the Picher Award or to use any means to stop the implementation of the Picher Award or who communicated to Air Canada their opposition to the implementation of the Picher Award. The Representative defendants are Lars T. Jensen and James Griffin, who were Air Canada pilots and Local Executive Council Members of CALPA until November 14, 1995.
• Subclass 7: The defendants who took no steps to encourage implementation of the Picher Award in the face of the alleged clear intention of the defendant Chris Pulley and the members of Subclasses 1 to 6 to reject the Picher Award and who do not fall in the other subclasses. The Representative Defendant is Gordon Greig.
On December 17, 2010, Class Counsel for the Plaintiffs delivered an offer to settle with respect to the members of subclasses 6 and 7. Class Counsel insisted that the offer be passed on to each of the Class Members, but the Defendants’ Class Counsel has declined to do so and instead brought this motion.
The offer for subclass 6 is made to the rank and file of Air Canada pilots who were not members of subclasses 1 through 5 and is not a Representative Defendant. The offer for subclass 7 is made to the approximately 400 Air Canada pilots who did not sign the May 5, 1995 “Air Canada Pilots Declaration of Solidarity.”
The text of the offer to settle is as follows:
The Plaintiffs hereby offer to settle the main action as against the individual members of Subclasses 6 and 7 (excepting the named Representative Defendants of those Subclasses and any person who is a member of any other Subclass as defined by the Order of the Honourable Justice P. Cumming dated March 13, 2001) as defined below, on the following terms:
1. Subclass 6 is defined as: Defendants who did not hold positions on the Air Canada MEC, Local Executive Councils, the Negotiating Committee of Air Canada pilots, the SMMAC or a position as a merger representative at any time between March 28, 1995 and November 14, 1995, but who allegedly acted to prevent implementation of the Picher Award by communicating directly or indirectly with representatives of Local Executive Councils, the Air Canada MEC, the Negotiating Committee or merger representatives to encourage or direct them to reject the Picher Award, to refuse to negotiate the Picher Award or who communicated to Air Canada their opposition to the implementation of the Picher Award.
2. Subclass 7 is defined as: Defendants who took no steps to encourage implementation of the Picher Award in the face of the clear intention of Chris Pulley and the members of sub-classes 1 to 6 to reject the Picher Award and who do not fall in other sub-classes.
3. With respect to the individual members of Subclass 6
(a) Payment by the member to the Representative Plaintiffs in the amount of $5,000 all-inclusive;
(b) Upon payment, the individual member of the Defendant subclass shall be thereby released from any liabilities to the Plaintiffs under any Judgment which may be obtained in this action;
(c) Any award of damages at trial as against those members of Subclass 6 and 7 who do not accept the within Offer to Settle shall be reduced in an amount proportionate to the number of members of the said Subclass who accept the within Offer to Settle.
4. With respect to the individual members of Subclass 7,
(a) The Subclass member shall provide to Plaintiffs’ counsel a sworn Statutory Declaration that states:
(i) He/she did not sign the pilot solidarity document marked as Exhibit 27 to the Examination for Discovery of James Griffith; and,
(ii) He/she did not communicate with Air Canada management prior to November 8, 1995 for the purpose of preventing implementation of a merged seniority list between Air Canada pilots and the Connector pilots;
(b) Upon receipt of the sworn Statutory Declaration by Plaintiffs’ Counsel, the Plaintiffs’ claim as against the member of the Subclass shall be deemed to have been released and the action dismissed as against that member without costs.
5. This Offer shall remain open for acceptance until two minutes after the commencement of trial.
The offer to settle was not extended to the Representative Defendants of subclasses 6 and 7. The Representative Plaintiffs explanation is that given the imminence of the trial, were the Representative Defendants to accept the offer, then it likely would not be possible to find a substitute before the start of the trial.
The trial is scheduled to begin on March 14, 2011. It is estimated that the trial will take 10 weeks to complete. The trial has been adjourned four times at the request of the Plaintiffs.
http://www.canlii.org/en/on/onsc/doc/20 ... c1378.html
I'm curious as well as to what recent decisions have finally concluded this chapter in Canadian aviation history ?