A federal appeals court has said retired U.S. Airways pilots may have the legal right to pursue claims that could give each of them thousands of dollars.
In a unanimous decision Tuesday, the appellate court for the District of Columbia said a trial judge was wrong to say that each pilot who believes he or she is owed money has to go through various administrative procedures before seeking judicial relief. Judge Janice Brown, writing for the court, said that appears unnecessary in this case.
Tuesday's ruling sends the case back to the trial judge to determine if the retired pilots — there could be more than 1,300 affected — can pursue their claims as a single class-action lawsuit.
Such a ruling would be to their advantage because the amount of money each is owed, while in the thousands of dollars, might not be worth pursuing an individual lawsuit. But cobbled together, their claims could be worth at least $10 million.
That's before any interest on what a court determines they are owed.
The ruling has no affect on U.S. Airways, which has since merged with and become part of American Airlines. The pension obligations of the pilots, who retired in the late 1990s, were assumed by the federal Pension Benefits Guaranty Corp. when the airline filed for bankruptcy.
“We are reviewing the decision and considering our options,” said Marc Hopkins, spokesman for the fund.
At the heart of the fight is the fact that pilots at the airline were entitled to take their pensions either as payouts over some period or as a lump sum of some lesser amount.
Brown said those who took the annuity started getting payments from the first day, but the lump sum did not come until 45 days later, with the airline saying it needed the time for the necessary computations.
But that delay, given the salaries and pensions of pilots, made that 45-day difference fiscally significant. One of two retired pilots figured his loss at approaching $3,700, the other pegged it at more than $5,000.
In an earlier ruling, the same appellate court said the delay was unreasonable and directed a trial judge to calculate what they were owed in interest. That led attorneys for the pair to seek similar relief for all the other pilots who retired at the same time.
Lawyers for the pension guaranty fund said that cannot happen because the pilots did not exhaust all their administrative appeals before seeking court relief, but Brown said that is not necessary.
She said those disputing pension benefits must seek administrative review if the fight is over whether the pension plan administrators are following what's in the plan.
But what's at stake here, Brown said, is not a dispute over the plan but the contention that the airline flat-out broke federal law which entitles them to their lump sum benefits “without unreasonable delay.” And that, Brown said, is a question that can go directly to the trial judge.
Brown and her colleagues also sent a message of sorts to the trial judge urging that the case be finally wrapped up, pointing out it was filed more than 14 years ago. She said her court “definitively decided the issue of liability,” telling the trial court simply to determine the amount of damages.
“Three years later, this case is no closer to a final disposition,” she wrote. Brown said she and the other appellate judges want the trial judge “can make short work of the motion for class certification and this action can move speedily to a final resolution.”