Seventh Circuit Court of Appeals Commentary : In Their Opinion : Lawyer & Attorney Michael E. Rigney : Kelley Drye & Warren Law Firm

HUGHES v. UNITED AIR LINES (February 8, 2011)

United Airlines and its flight attendant union agreed that flight attendants retain seniority for only three years while on medical leave. When Constance Hughes' three-year deadline was near, United asked her to return to work. She received medical clearance and completed her requalification training. Unfortunately, a few days before her first assigned flight, she fell and injured herself so severely that she could not perform her duties. United terminated her employment. Hughes brought suit in Illinois state court, alleging that her discharge was in retaliation for filing a workers' compensation claim. Notwithstanding the complaint’s state law basis, United removed to federal court on federal question grounds. It contended that the Railway Labor Act completely preempts the field. Judge Bucklo (N.D. Ill.) agreed, based on the Seventh Circuit’s Graf decision, denied the motion to remand, and dismissed the complaint. Hughes appeals.

In their opinion, Chief Judge Easterbrook and Judges Cudahy and Posner vacated and remanded with instructions to remand to Illinois state court. The Court first distinguished between the "misleadingly named" doctrine of complete preemption and ordinary preemption. Ordinary preemption is an affirmative defense that must be raised in the court where the litigation was filed. Complete preemption, on the other hand, is not a defense. It is a theory under which federal law so controls a field that a state law claim is not possible. The Court turned to its own and the Supreme Court's jurisprudence on the issue. In Graf, the Court held that a retaliatory discharge case like Hughes' against an employer covered by the Railway Labor Act was completely preempted. It extended that principle to other employers the following year in Lingle. The Supreme Court reversed the Lingle decision, however, holding that a retaliatory discharge claim is preempted only if it requires construction of a collective bargaining agreement. The Supreme Court then extended that principle to a Railway Labor Act employer in Hawaiian Airlines. The Court concluded that Lingle and Hawaiian Airlines controlled and that Graf had to be overruled. Without diversity of citizenship, the case must be remanded to the state court. That is the appropriate forum for United to raise its claim of ordinary preemption on the ground that Hughes' claim requires interpretation and construction of the collective bargaining agreement.

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DIRECTV v. BARCZEWSKI (May 13, 2010)

David Barczewski and Jonathan Wisler purchased electronic equipment that was actually marketed for its ability to intercept DirecTV signals. They both also participated in discussion groups whose purpose was to exchange advice about intercepting and decrypting those signals. When DirecTV sued them, a jury found that Wisler had intercepted signals without authorization for 435 days and that Barczewski had distributed four unauthorized decryption devices. The court imposed a statutory penalty of $44,000 against Barczewski and $43,500 against Wisler. Barczewski and Wisler appeal.

In their opinion, Chief Judge Easterbrook and Judges Flaum and Sykes affirmed in part and vacated and remanded in part. The Court first summarily rejected defendants' contentions that DirecTV did not have a private right of action under 18 U.S.C. § 2520 or 47 U.S.C. § 605. It noted that every court of appeals that had considered the questions agreed. It also quickly disposed of their argument that an exception in the statute for an "aeronautical communication system" applied because a DirecTV witness at trial stated that DirecTV was such a system. Whatever the witness meant, the Court interpreted the statute and concluded that DirecTV is not the kind of system referred to in the exception. Finally, the Court addressed the issue of the penalty. Although it affirmed the calculation of Barczewski’s penalty, it vacated the award of the penalty against Wisler. The statute provides that a court "may” assess the greater of a) the sum of the plaintiff's damages and the violator's profits, or b) the greater of $100 per day of violation or $10,000. In 1990, the Court held, in Rodgers v. Wood, that the imposition of the highest penalty under that calculation was mandatory. Part of the Rodgers rationale was that Congress changed the statute and replaced “shall” with “may” without any explanation for a change from mandatory to discretionary. Rodgers was also the first Court of Appeals decision interpreting that section. Since Rodgers, each of the four other circuits that have addressed the question has disagreed – and concluded that the language is permissive. Upon a careful review of the statutory language, the rationale of Rodgers, the analyses from the other circuits, and the policy considerations, the Court overruled Rodgers' holding that the maximum penalty was mandatory. It vacated the award and remanded to the district court.

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