ABF wins appeal; case returns to federal court
by July 6, 2011 11:52 am 80 views
The Eighth Circuit Court of Appeals ruled Wednesday (July 6) in favor of Arkansas Best Corp., which returns the company’s lawsuit against YRC and the Teamsters back to a federal district court in Little Rock.
On Nov. 1, Arkansas Best Corp. — the parent company of ABF Freight System — filed a lawsuit seeking the $750 million in financial damages from alleged violations of a National Master Freight Agreement (NMFA) by the International Brotherhood of Teamsters and others.
YRC received three rounds of wage and benefit concessions from the Teamsters, with the most recent announced Nov. 1 that includes up to $350 million annually through 2013. Previously, the Teamsters voted to approve a 15% pay cut among unionized YRC drivers. ABF has been unable to receive similar concessions from the union.
On Dec. 16, U.S. District Court Judge Susan Webber Wright (Eastern District of Arkansas) dismissed the suit for lack of subject matter jurisdiction. The Teamsters said Wright’s ruling was the “best possible outcome” for the 25,000 union drivers at YRC and the 7,000 at ABF.
On April 12, attorneys for ABF presented their case in the United States Court of Appeal for the Eighth Circuit (St. Louis) as to why the court should overturn a lower court ruling.
The 17-page ruling issued by the three-judge panel included several comments that favored the ABF argument that the lawsuit should be heard in the district court.
“In view of the course of dealing between ABF and the Union – detailed at length by the district court – the Union may have defenses to ABF’s claims. However, as to the Union defendants and its bargaining representative TNFINC, ABF has rights under the NMFA sufficient to show an injury-in-fact that is fairly traceable to the challenged acts of the union defendants and is likely redressable in court,” the ruling noted.
In the conclusion, the court was clear and succinct: “The judgment of the district court is vacated, and this case is remanded for further proceedings.”
On Dec. 16, U.S. District Court Judge Susan Webber Wright (Eastern District of Arkansas) dismissed the suit for lack of subject matter jurisdiction. The Teamsters said Wright’s ruling was the “best possible outcome” for the 25,000 union drivers at YRC and the 7,000 at ABF.
Trucking industry watchers have said a successful lawsuit against YRC could send the troubled trucking company into bankruptcy.
"ABF is very pleased with this decision and looks forward to further proceedings on its lawsuit seeking to level the playing field for all parties of the National Master Freight Agreement (NMFA)," the company said in a short statement released Wednesday.
Overland Park, Kan.-based YRC noted in a federal filing of Mar. 14 that it may be at the end of its financial rope. YRC is the largest less-than-truckload carrier in the nation, and ABF is considered the second largest LTL.
YRC narrowly avoided bankruptcy in January 2010 through a complex bond swap agreement with creditors. The less-than-truckload company had piled up a mountain of debt with the $1.07 billion acquisition of Roadway Corp. in 2003 and the $1.23 billion acquisition of USF Corp. in 2005.