Justia Transportation Law Opinion Summaries

In this consolidated appeal from adversary proceedings challenging an alleged diversion of funds to which Peaje Investments LLC (Peaje) claimed it was entitled, the First Circuit held that Peaje did not hold a statutory lien on certain toll revenues of the Puerto Rico Highways and Transportation Authority (Authority).The Authority and the Commonwealth of Puerto Rico commenced bankruptcy cases under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act, 48 U.S.C. 2101-2241. Peaje, the beneficial owner of $65 million of uninsured bonds issued by the Authority, instituted adversary proceedings alleging that its bonds were secured by a lien on certain Authority toll revenues and that the Authority and the Commonwealth of Puerto Rico were diverting funds to which Peaje was entitled under the lien and using them for purposes other than paying the bonds. The First Circuit affirmed the Title III court’s primary grounds for its order denying Peaje’s request for a preliminary injunction and relief from the stay and otherwise vacated and remanded the matter, holding (1) Peaje did not hold a statutory lien on Authority toll revenues; and (2) now that it is clear that Peaje has no statutory lien, the district court’s alternative reasons for denying relief should be reconsidered de novo on an updated record. View "Peaje Investments LLC v. Puerto Rico Highways & Transportation Authority" on Justia Law

WI buys furniture wholesale. OEC provided WI with non-vessel-operating common carrier transportation services. WI signed an Application for Credit that granted a security interest in WI property in OEC’s possession, custody or control or en route. As required by federal law, OEC also publishes a tariff with the Federal Maritime Commission, which provides for a Carrier’s lien. WI filed voluntary Chapter 11 bankruptcy petitions. OEC sought relief from the automatic stay, arguing that it was a secured creditor with a possessory maritime lien. OEC documented debts of $458,251 for freight and related charges due on containers in OEC’s possession and $994,705 for freight and related charges on goods for which OEC had previously provided services. The estimated value of WIs’ goods in OEC’s possession was $1,926,363. WI filed an adversary proceeding, seeking release of the goods. The bankruptcy court ruled in favor of WI, citing 11 U.S.C. 542. The district court affirmed, holding that OEC did not possess a valid maritime lien on Pre-petition Goods. The Third Circuit reversed, noting the strong presumption that OEC did not waive its maritime liens on the Prepetition Goods, the clear documentation that the parties intended such liens to survive delivery, the familiar principle that a maritime lien may attach to property substituted for the original object of the lien, and the parties’ general freedom to modify or extend existing liens by contract. View "In re: World Imports LTD" on Justia Law

In Chapter 11 bankruptcy, the airline extracted concessions that resulted in an approximate 40 percent wage cut for pilots in return for an $888 million claim in bankruptcy to be disbursed as stock shares. The union first suggested that a pilot's share should reflect time that the pilot worked during the 85-month concessionary period, but ultimately adopted a cutoff date for determining which pilots would receive full shares. The cutoff assumed that any pilot employed on the effective date of the Restructuring Agreement would remain employed through its termination four years later. Any pilot who left before the date would receive a share based the number of months that the pilot worked during the concessionary period. All participants in the Early Retirement Program retired after the cutoff date. Plaintiffs, retirees who reached mandatory retirement age and left before the cutoff, received shares at least $100,000 less than expected. The union rejected appeals. The district court granted summary judgment to the union. The Sixth Circuit affirmed, rejecting claims that the union breached its duty of fair representation, Railway Labor Act, 45 U.S.C. 15, and discriminated based on age, Age Discrimination in Employment Act, 29 U.S.C. 623(c)(1), and Mich. Comp. Laws 37.2204(a). View "Bondurant v. Air Line Pilots Ass'n, Int'l" on Justia Law