A federal jury ruled Wednesday against pilots from the pre-merger US Airways ( symbol), who formed a new labor union in order to reject an arbitrator' s seniority ruling that appeared to favor pilots from America West after the two airlines merged in 2005.

The jury in U.S. District Court in Phoenix ruled that the U.S. Airline Pilots Association breached its duty to represent the six America West pilots who were the plaintiffs in the case.

"All the parties knew going in that selecting an arbitrator and going to arbitration was final and binding on both groups," said Ray Burkett, a six-year America West pilot who was vice chairman of the Las Vegas chapter of the Air Line Pilots Association (ALPA), which was ousted by the U.S. Airline Pilots Association (USAPA) in a bitter April 2008 union election.

"Their argument was that the ruling was unfair," Burkett said. "Our position was about honoring something that we all said going in that we were going to honor."

Burkett also questioned a decision to have the captain and first officer of Flight 1549 (Captain Chesley "Sully" Sullenberger and First Officer Jeff Skiles), which made a miraculous landing on the Hudson River in January, testify on behalf of USAPA. "It was nothing more than a ploy to the jury," he said. "The jury was probably insulted by having those two guys there because it appeared to be manipulative. It didn't really have anything to do with this case."

The essence of the argument by pilots from the pre-merger US Airways, known as "the east," was that the seniority ruling was simply a step on the path to seniority integration, which is ultimately nothing more than a section of the contract negotiated between the pilots union and the airline.

Their principal objection has been that hundreds of east pilots, with 15 or more years of seniority, would become junior to west pilots with far less seniority. The relative financial strength of the two airlines, both of them troubled, was also a much disputed factor in the ruling by arbitrator George Nicolau.

USAPA attorneys are working on an expedited appeal and a stay of any proposed relief, said president Mike Cleary said, in a prepared statement.

The ruling was not unexpected. East pilots said from the start that the Phoenix judge and potentially the jury was partial to pilots for Phoenix-based America West.

"Given the circumstances, USAPA has a hard time accepting the idea that we encountered truly unbiased impartiality," Cleary said. "Required to argue our case with limited time and evidence, hamstrung by questionable rulings and incorrect instruction, USAPA quite literally fought this battle with both hands tied behind its back."

"The Ninth Circuit Court of Appeals and, if necessary, the United States Supreme Court, is the appropriate place for the law to be truly vetted," Cleary said.

Meanwhile, Burkett said the long, bitter battle over seniority integration has delayed the pilots' joint effort to get a new contract. "This thing has given the company another year and a half of bankruptcy contract rates on both sides," he said. US Airways, meanwhile, has been unable to fully integrate its operations four years after the merger. Its shares fell 12.6% to $2.98 on Wednesday, while the Amex Airline Index ( XAL) was down 5.7%.

Burkett said the ruling sought to equalize career prospects for pilots from both sides, in the sense that the anticipated pre-merger wait times for upgrades from first officer to captain were generally maintained. He also said that given the reluctance to relocate to new crew bases, most pilots in Charlotte, N.C., Philadelphia and Phoenix would see minimal change in their status.

Now, Burkett says, "Some of us ALPA people are going to step forward and try to heal the wounds. We are not going to see west pilots shoving the east pilots' faces in it, by any means."

The continued contentiousness associated with the US Airways pilots seniority integration was frequently cited as the key factor in a push by Delta ( DAL) and its pilot leaders to have seniority integration largely resolved before a merger with Northwest was completed in October.