Jacoby v. Norfolk Southern Railway Company

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

DAVID JACOBY,

Plaintiff,

v. Case No. 3:22-cv-2709-JPG

NORFOLK SOUTHERN RAILWAY

COMPANY.,

Defendant.

MEMORANDUM AND ORDER

I. Introduction

This matter comes before the Court on Defendant Norfolk Southern Railway Company

(“Norfolk Southern” or “Defendant”) Motion to Dismiss Plaintiff David Jacoby (“Plaintiff” or

“Jacoby”) (Doc. 10). Norfolk Southern requests this Court dismiss Jacoby’s complaint for lack of

subject matter jurisdiction, or in the alternative, for failure to state a claim. Jacoby opposes the

motion. (Doc. 16). Norfolk Southern did not file a reply.

II. Factual and Procedural Background

This is an action under the Railway Labor Act, 45 U.S.C. § 151, et seq. (“RLA”). Jacoby

was a conductor/engineer/remote control operator (“RCO”) as Norfolk Southern from 1993 until

October 8, 2020. Compl at ¶ 2. Jacoby was a member of the Brotherhood of Locomotive Engineers

and Trainmen (“BLET”), which is a labor union representing railroad employees who operate

railroad trains. Id. at ¶ 4. Jacoby’s mutual rights and obligations for work performed was governed

by a contract, or collective bargaining agreement (“CBA”) between Norfolk Southern and BLET.

Id.

Under the CBA, appeals “shall be handled in accordance with the provisions of the

agreement covering the handling of claims and/or grievances.” Pursuant to Article 33, Section 1

of the CBA, an appeal of a grievance or claim must be taken within 60 days from receipt of notice.”

If an appeal is not made within 60 days, the matter is considered “closed.” However, if the appeal

is denied, the employee has one year in which to file for arbitration before the National Railroad

Adjustment Board or a Public Law Board established by Norfolk Southern and an employee’s

union.

On October 8, 2020, Jacoby was issued a Norfolk Southern-issued Remote Intelligent

Terminal (“RIT”), a device similar to an iPad or computer tablet, to look up a rail car him and his

crew were switching. Jacoby’s supervisors were conducting operations testing, meaning observing

Jacoby for rules compliance. Id. at ¶10. Before using the RIT, Jacoby performed a job briefing

where he was advised he was to use the RIT and the switchman/brakeman should not “foul,” which

refers to coming within four feet of the nearest rail, or do any work until Jacoby notified the

switchman/brakeman he was done using the RIT. Id. at ¶¶ 11-12. The managers approached him

and told Jacoby that because he was standing “directly next to, not on, the caboose” they were

pulling him off of service pending a formal investigation pursuant to the CBA. Id. at ¶ 12.

The next day on October 9, Norfolk Southern sent Jacoby a letter notifying him of the rule

violation regarding the RIT, and setting the formal investigation on October 15, 2020. Id. at ¶ 13.

The investigation hearing was held on October 15 where Norfolk Southern called witnesses, put

on evidence, and Jacoby and his union representative attended and asked questions of witnesses.

Id. ¶ 14. A railroad manager acted as the judge, and the transcript for the hearing was 21 pages

long. Id. at ¶ 15. The Norfolk Southern manager determined that Jacoby violated the rule regarding

the RIT and on October 29, 2020, notified Jacoby and BLET that the discipline assessed was

dismissal/termination. Id. at ¶ 16.

On November 9, 2020, BLET Local Chairman William Pope, sent an email to a contact at

Norfolk Southern, Lisa Amico inquiring as to whether appeals were to be emailed or “have we

gone back to snail mailing them.” (Doc. 16-10 at 3). After hearing no response, Pope emailed

Megan Wilson, another contact at Norfolk Southern. (Doc. 16-10 at 2-3). Ms. Wilson told Pope

that “[c]laims and appeals can be emailed directly to TN CR INVESTIGATIONS

(TNCRInvestigations@nscorp.com).” Id. at 2.

Pursuant to the contract, Jacoby’s union, through BLET Chairman Pope, appealed, or

attempted to appeal, the dismissal via letter, which was dated November 11, 2020. Id. at 17. The

email to the TNCRInvestigations@nscorp.com was sent on November 12, 2020. Id. On November

19, 2020, Pope followed up with Norfolk Southern regarding whether Jacoby’s email had been

received. (Doc. 16-9). On November 20, 2020, Dixie Deitz, from the investigations email account

above from Norfolk Southern stated that “[t]hese emails were received.” (Doc. 16-9). On February

2, 2021, Pope emailed the same email address asking for an update stating Norfolk Southern failed

to respond within 60 days from the date of appeal and requested Norfolk Southern honor the

contract by putting Jacoby back to work with seniority unimpaired work and with back pay or any

other losses sustained. In response, Norfolk Southern stated the following in a letter:

[I]n accordance with the Agreement, claims and grievances must be submitted in

writing and an email does not fulfill that obligation. To date, my office has not

received an appeal through the U.S. Mail. Based on the above, your appeal was not

delivered in accordance with the agreement and is now outside the time limits for

appealing discipline in accordance with the Collective Bargaining Agreement and

is barred from further handling. Therefore, I am closing my files.

(Doc. 16-11 at 1).

Jacoby now alleges that by closing the file, Norfolk Southern “prevented and precluded”

Jacoby from having his case heard by an arbitration panel and Jacoby cannot get relief under the

RLA arbitration process. Jacoby filed suit in this Court on November 21, 2022, stating that over

the last two years BLET representatives have requested Norfolk Southern live up to the contract

and put Jacoby back to work with “seniority unimpaired, remove the discipline, and pay him lost

wages and benefits or do what is necessary to allow an appeal to an arbitration board.” Compl. at

¶ 23. Jacoby further alleges that Norfolk Southern’s “willful and longstanding violation of

Plaintiff’s rights under RLA were and are being done with malice and indifference” and were

“intentional, outrageous and egregious, and warrant punitive damages to punish Defendant and

deter other carriers from like conduct.” Id. at ¶ 28. Norfolk Southern argues that whether an appeal

is or is not timely appealed is a routine subject for arbitration under the RLA, and therefore this

Court lacks jurisdiction. (Doc. 11). In the alternative, Norfolk Southern alleges Jacoby’s complaint

fails to state a claim under Rule 12(b)(6) and should be dismissed as untimely.

III. Analysis

a. Legal Standards

Under Rule 12(b)(1), a court must dismiss a claim over which it lacks subject-matter

jurisdiction. See Fed. R. Civ. P. 12(b)(1). A defendant makes a facial attack on subject-matter

jurisdiction when it asserts that the plaintiff’s allegations, taken as true, don't support an

inference that subject-matter jurisdiction exists. Bazile v. Fin. Sys. of Green Bay, Inc., 983 F.3d

274, 279 (7th Cir. 2020). Facial challenges require a court to “look to the complaint and see if

the plaintiff has sufficiently alleged a basis of subject matter jurisdiction” whereas factual

challenges refute the existence of jurisdiction notwithstanding a complaint's allegations. Apex

Digital, Inc. v. Sears Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir. 2009). For factual

challenges, a court may look beyond a complaint's allegations and, if a defendant presents

evidence that calls into question a court's jurisdiction, then the “presumption of correctness that

we accord to a complaint's allegations falls away,” and plaintiff bears the burden to present

evidence that a court has subject-matter jurisdiction. Id. (quoting Commodity Trend Serv., Inc. v.

Commodity Futures Trading Comm'n, 149 F.3d 679, 685 (7th Cir. 1998)).

To survive a motion to dismiss under Rule 12(b)(6), a complaint “must state a claim to

relief that is plausible on its face.” Yeftich v. Navistar, Inc., 722 F.3d 911, 915 (7th Cir. 2013).

To be facially plausible, the complaint must include enough factual allegations to allow “the

court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544,

556 (2007)). In evaluating the sufficiency of a complaint, a court accepts as true all well-pled

factual allegations in the complaint and draws all inferences in the plaintiff's favor. Hickey v.

O'Bannon, 287 F.3d 656, 658 (7th Cir. 2002)

b. Federal Jurisdiction

The RLA establishes the framework for resolving railroad labor disputes. Atchison, T. &

S.F.R. Co. v. Buell, 480 U.S. 557, 562, 107 S.Ct. 1410, 94 L.Ed.2d 563 (1987). Congress passed

the RLA out of a concern that a labor conflict could bring the “nation's transportation network”

to a “standstill.” Bhd. of Locomotive Eng'rs & Trainmen v. Union Pac R.R. Co., 879 F.3d 754,

755 (7th Cir. 2017). There are two types of relevant disputes under the RLA: major disputes and

minor disputes. Hughes v. United Air Lines, Inc., 634 F.3d 391, 394 (7th Cir. 2011). Norfolk

Southern argues the dispute at issue in this case is a minor dispute divesting this Court from

federal jurisdiction.

A major dispute arises from the creation of new contracts or modifications of existing

contracts that affect any of the mandatory subjects of bargaining established in the RLA. See

Consolidated Rail Corporation (Conrail), v. Railway Labor Executives' Assn., 491 U.S. 299,

302-303, S.Ct. 2477, 105 L.Ed.2d 250 (1989); see also Brotherhood of Locomotive Eng'rs &

Trainmen v. Union Pac. R.R. Co., 879 F.3d 754, 755–56 (7th Cir. 2017) (“Brotherhood 2017”)

(citing Conrail and explaining that “[i]f a disagreement arises over the formation or amendment

of a collective bargaining agreement (CBA), it is considered a ‘major’ dispute under the Act, and

it must be decided by a court”). By contrast, “minor disputes” involve disputes “growing out of

grievances or out of the interpretation or application of agreements concerning rates of pay,

rules, or working conditions.” 45 U.S.C. § 153. They concern issues “ ‘grounded in’ a collective

bargaining agreement.” Carlson v. CSX Transp., Inc., 758 F.3d 819, 831–32 (7th Cir. 2014)

(quoting Hawaiian Airlines, 512 U.S. at 256, 114 S.Ct. 2239). Put another way, “major disputes

seek to create contractual rights, minor disputes to enforce them.” Conrail, 491 U.S. at 302, 109

S.Ct. 2477. When confronted with a major dispute, a court may use its injunctive authority to

maintain the status quo while mediation and bargaining occur. See Detroit & T.S.L.R. Co. v.

United Transp. Union, 396 U.S. 142, 90 S.Ct. 294, 24 L.Ed.2d 325 (1969) (explaining that

district courts have jurisdiction to enjoin a change to the status quo pending completion of

mandatory bargaining and mediation procedures of RLA).

However, “major” and “minor” are terms of art and “not to be taken in their ordinary

sense.” Judge Posner has said that it would be more informative to describe a major dispute a

“modification” dispute and a minor dispute an “interpretation” dispute. Chicago & N. W. Transp.

Co. v. Ry. Lab. Executives' Ass'n, 908 F.2d 144, 148 (7th Cir. 1990). In other words, a minor

dispute is one over the interpretation or application of the collective bargaining agreement (for a

grievance is merely a complaint that arises under the agreement, Lancaster v. Norfolk & Western

Ry., 773 F.2d 807, 814 (7th Cir.1985)), while a major dispute is one in which the carrier or

employer wants to change the agreement. Chicago & N. W. Transp. Co. v. Ry. Lab. Executives'

Ass'n, 908 F.2d 144, 148 (7th Cir. 1990).

But minor disputes must go directly to binding arbitration, typically conducted by the

National Railroad Adjustment Board. See Conrail, 491 U.S. at 303–04, 109 S.Ct. 2477. The

RLA provides that railroads and their employees must resolve all “minor” disputes through

arbitration rather than in the courts. See Rabe v. United Air Lines, Inc., 636 F.3d 866, 872 (7th

Cir. 2011). If a claim can be “conclusively resolved” by interpreting an employment contract

such as a collective bargaining agreement (“CBA”), then it likely constitutes a “minor dispute.”

Brown v. Ill. Cent. R.R. Co., 254 F.3d 654, 658 (7th Cir. 2001)

When a railroad labor dispute reaches a federal court, our central responsibility is “that of

taxonomist”—classifying the dispute as major or minor. Brotherhood 2017, 879 F.3d at 757.

Given the RLA's strong preference for arbitration, a railroad bears a “relatively light burden” in

persuading the court that its action is pursuant to existing contractual authority and thus a minor

dispute under the RLA. Conrail, 491 U.S. at 307, 109 S.Ct. 2477 (internal citation omitted). “If

the railroad can articulate an argument that is ‘neither obviously insubstantial or frivolous, nor

made in bad faith,’ the court lacks jurisdiction to do anything but dismiss the case and allow

arbitration to go forward.” Brotherhood 2017, 879 F.3d at 758 (quoting Conrail, 491 U.S. at 310,

109 S.Ct. 2477). Plain and simple, “in making the choice between major and minor, there is a

large thumb on the scale in favor of minor, and hence arbitration.” Id.

The Seventh Circuit recently found that a dispute between Union Pacific Railroad

company and a union was a minor dispute. Specifically, a “consistent practice of unilaterally

modifying its attendance policy reflects its [Union Pacific’s] authority to do so as an implied

term of its collective bargaining agreement with employees.” BLET GCA UP v. Union Pac. R.R.

Co., 988 F.3d 409, 413 (7th Cir. 2021).

The dispute as the Court sees it is the following: Norfolk Southern dismissed an

employee after a timely and properly conducted hearing. Jacoby, through his union

representative attempted to appeal the decision via email, shortly after confirming that Norfolk

Southern would accept the appeal via email. After the time had passed for Jacoby to appeal via

certified mail (60 days), Norfolk Southern indicated it, in fact, did not accept the appeal via

email and closed the file. Is this dispute over where the employer wants to change the agreement,

or one in which there exists a dispute over the interpretation of the agreement? This does not fit

squarely within either question. It appears that Norfolk Southern had an agreement, told Jacoby’s

representative that it was allowing appeals via email, and then later reversed its position.

Norfolk Southern frames the issue differently. They state that Jacoby and Norfolk

Southern “take differing positions on the meaning and application of the discipline article in the

applicable CBA.” (Doc. 11 at 8). While both parties differ over whether “in writing” in the CBA

allows for appeals to be submitted via email, the Court could view the subsequent emails as

potential dispute which lies outside the agreements. Bhd. of Locomotive Engineers & Trainmen

(Gen. Comm. of Adjustment, Cent. Region) v. Union Pac. R.R. Co., 879 F.3d 754, 757 (7th Cir.

2017) (“Thus, Airline Pilots is helpful to the Union only if we find that the present dispute lies

outside the boundaries of the agreements between it and the Railroad.”). Jacoby, through his

union representative asked for confirmation that appeals would be accepted via email in light of

the global pandemic. Norfolk Southern responded with the email where appeals could be

accepted. The Court is especially concerned in this case where Jacoby alleges that by closing the

file in such a manner, Norfolk Southern precluded Jacoby from having his case heard by an

arbitration panel, and therefore precluding relief.

However, Norfolk Southern does not reference how the set of emails between Jacoby’s

union representative and Norfolk Southern could amount to a modification of the agreements, or

why Norfolk Southern agreed to accept appeals via email and took the opposite position when it

was too late for Jacoby’s appeal. Additionally, Jacoby does not take a position as to whether this

dispute is a minor or major dispute. This Court is without sufficient facts and legal arguments to

make a determination on subject matter jurisdiction.

The Court will not order supplemental briefing at this time, but however, will set this

matter for a hearing to discuss these issues.

c. Failure to State a Claim

Norfolk Southern states that an independent and separate reason exists to dismiss

Jacoby’s complaint. Norfolk Southern argues that if February 2, 2021 wherein Norfolk Southern

indicated it was “closing his file” constituted an unequivocal denial of the claim, Jacoby had six

months from February 2, 2021 to file suit seeking to compel arbitration. Of course, the Court

cannot evaluate the merits on a Rule 12(b)(6) motion unless it has jurisdiction to consider it. The

Court will note that Jacoby’s response has merit. Jacoby states that when he “called out” Norfolk

Southern on its failures, Norfolk Southern told Jacoby they would “make it right” and was

“looking into it.” In short, Jacoby indicates that it has done everything to avail himself of a non-

judicial resolution, and therefore the statute of limitations should be tolled.

The Court does not take this issue up at this time.

IV. Conclusion

This Court hereby sets this matter for a hearing to discuss the issues presented herein.

The hearing will be set by separate notice. The parties should be prepared to discuss the

questions related to federal jurisdiction, as well as the gaps in facts and explanations in the

parties’ briefs.

IT IS SO ORDERED.

DATED: April 13, 2023

/s/ J. Phil Gilbert.

J. PHIL GILBERT

U.S. DISTRICT JUDGE