Brotherhood of Railroad Signalmen v. National Railroad Passenger Corporation

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 14, 2023 Decided September 24, 2024

No. 23-7018

BROTHERHOOD OF RAILROAD SIGNALMEN,

APPELLEE

v.

NATIONAL RAILROAD PASSENGER CORPORATION,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:22-cv-00841)

Donald J. Munro argued the cause and filed the briefs for

appellant.

Richard S. Edelman argued the cause and filed the brief

for appellee.

Before: HENDERSON, MILLETT and PILLARD, Circuit

Judges.

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Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: In 2017, the

Brotherhood of Railroad Signalmen (the Union)—the

designated bargaining representative for National Railroad

Passenger Corporation (Amtrak) employees who perform

signal and communications work—initiated proceedings in

federal district court contesting Amtrak’s refusal to commit to

using Union-represented signalmen in a newly acquired

building. The district court sent the case to mandatory

arbitration under the Railway Labor Act (RLA), 45 U.S.C.

§ 151 et seq. The National Railroad Adjustment Board (the

Board) dismissed the claim, concluding that it did not have

jurisdiction because the Union was seeking relief based on

hypothetical facts. On review, the district court vacated the

award and remanded for further proceedings, holding that the

Board did not consider or interpret the parties’ agreement.

Amtrak appeals the district court’s vacatur, arguing that

the award should be upheld under the highly deferential

judicial standard of review because the award is at least

arguably based on rail industry common law incorporated in

the parties’ agreement and on Rule 56 of the collective

bargaining agreement. Even under that limited standard of

review, we affirm the district court and find that the arbitral

award should be vacated because the award did not decide the

dispute based on the parties’ contract; instead it relied on legal

principles governing federal courts’ subject-matter

jurisdiction, a matter wholly outside the scope of the Board’s

authority.

I. BACKGROUND

In 2015, Amtrak acquired the Railway Express Agency

(REA) Building in Washington, D.C., in connection with a

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planned expansion to Union Station. The Union asserted that

communication and signal work in the REA Building should

accrue to its members; Amtrak refused to commit to that

position and argued the collective bargaining agreement did not

cover the REA Building.

In 2017, the Union filed a complaint in federal district

court alleging that Amtrak had violated the collective

bargaining agreement by refusing to assign work in the REA

Building to Union signalmen. Bhd. of R.R. Signalmen v. Nat’l

R.R. Passenger Corp., 310 F. Supp. 3d 131, 137 (D.D.C. 2018)

(Signalmen I). Amtrak moved to dismiss for lack of

jurisdiction, arguing that the dispute was “minor” under the

RLA and therefore subject to binding arbitration. Def.’s Mem.

at 1, ECF No. 7-1, Signalmen I, 310 F. Supp. 3d 131 (No. 17-

1287). The district court agreed with Amtrak and dismissed

the case. Signalmen I, 310 F. Supp. 3d at 138-141.

The Union then set out on the arbitration path and grieved,

by letter, Amtrak’s alleged violation of the collective

bargaining agreement. Amtrak responded that the grievance

was “procedurally defective” because it failed to identify

specific allegations, claimants and remedies. J.A. 174. After

further correspondence, the Union submitted the matter for

arbitration before the Board. The parties submitted written

briefs and supporting materials and Amtrak argued for

dismissal on several grounds, including lack of jurisdiction,

procedural defects and failure on the merits.

On December 15, 2021, the Board issued Award

No. 44649 dismissing the Union’s claim. The Board

summarized the parties’ positions, including Amtrak’s

contention “that the Claim must be dismissed because it is

procedurally defective; the original Claim named no

Claimants; identified no specific work and requested no

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monetary relief.” J.A. 17. But “[m]ore importantly,” the Board

explained, “the original claim requests what is essentially a

declaratory judgment, inasmuch as the statement of claim now

before the Board is asking for future work to be assigned to

[Union] members.” J.A. 18. The Board continued:

The Board does not have jurisdiction to

interpret and apply the Agreement to future

situations, the facts of which are unknown.

Declaratory judgments and injunctive relief are

beyond the jurisdiction of the Board, whose

“function is to resolve claims arising from

established or determinable facts and issues.”

PLB No. 1202, Award No. 1. . . .

The Board agrees with the Carrier [Amtrak] that

the claim is a request for an advisory opinion

and is therefore beyond the Board’s jurisdiction.

It is a fundamental principle of jurisprudence—

something that first-year law students learn in

the first semester of Civil Procedure—that there

must be a case in controversy before a lawsuit

can be filed; the fact that an entity might do

something in violation of a contract is not

enough to establish a right to sue for breach of

that contract. In this claim, there is no

contention and no evidence that the Carrier has

assigned any communications work at the REA

Building to anyone, much less to non-[Union]-

represented employees.

The Organization [Union] is asking the Board

to rule on a hypothetical set of facts that has yet

to materialize. The Board’s jurisdiction is

limited to actual controversies between the

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parties. Until such a controversy arises, the

Board must dismiss the claim before it.

J.A. 18 (emphasis added).

The Union responded by filing a petition in the district

court seeking review and vacatur of the arbitral award. The

parties cross-filed motions for summary judgment. Amtrak

argued that the award should be affirmed because it interpreted

the parties’ agreement, rather than defending it on the

jurisdictional ground it raised before the Board. The district

court noted the “exceedingly high” burden to vacate an arbitral

award but faulted the award for (1) failing to acknowledge or

cite to the collective bargaining agreement and (2)

contradicting itself as to the basis for its jurisdictional

conclusion because the award stated at the outset that it “ha[d]

jurisdiction” but later concluded that the claim was “beyond the

Board’s jurisdiction.” Bhd. of R.R. Signalmen v. Nat’l R.R.

Passenger Corp., 2023 WL 1469498, at *2-3 (D.D.C. Feb. 2,

2023) (Signalmen II). “Because the Court [could ]not conclude

that the Board considered and interpreted the parties’

agreement, and because Amtrak d[id] not defend the award on

jurisdictional grounds,” the district court vacated the award and

remanded for further proceedings. Id. at *3. This appeal

followed. 1

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At oral argument, neither party could speak to whether there

is currently any signalmen work being done at the REA Building.

Counsel for the Union stated that the Union does not have “any role”

in the REA Building, Oral Arg. Tr. 37:24-38:25, and counsel for

Amtrak stated that he had no knowledge as to the current status of

the building based on the record, Oral Arg. Tr. 40:25-42:15.

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II. ANALYSIS

Under Section 3 First (q), an arbitral award “may be set

aside, in whole or in part, or remanded to the division, for

failure of the division [of the Board] to comply with the

requirements of [the RLA], for failure of the order to conform,

or confine itself, to matters within the scope of the division’s

jurisdiction, or for fraud or corruption by a member of the

division making the order.” 45 U.S.C. § 153 First (q).

Our review is “very limited”: “[I]f an arbitrator is even

arguably construing or applying the contract and acting within

the scope of his authority, the fact that a court is convinced he

committed serious error does not suffice to overturn his

decision.” Major League Baseball Players Ass’n v. Garvey,

532 U.S. 504, 509 (2001) (per curiam) (cleaned up); see also

Nw. Airlines, Inc. v. Air Line Pilots Ass’n, Int’l, 808 F.2d 76,

80 (D.C. Cir. 1987) (judicial standard of review of arbitral

awards is “amongst the narrowest known to the law” (quotation

omitted)). Our inquiry “is not whether the arbitrator or

arbitrators erred in interpreting the contract; it is not whether

they clearly erred in interpreting the contract; it is not whether

they grossly erred in interpreting the contract; it is whether they

interpreted the contract.” Hill v. Norfolk & W. Ry. Co., 814

F.2d 1192, 1195 (7th Cir. 1987).

An exceedingly narrow standard of review does not mean,

however, that anything goes. See Verizon Washington, D.C.

Inc. v. Commc’ns Workers of Am., AFL-CIO, 571 F.3d 1296,

1304 (D.C. Cir. 2009) (Henderson, J., concurring). The arbitral

award “must draw its essence from the contract and cannot

simply reflect the arbitrator’s own notions of industrial

justice.” United Paperworkers Int’l Union, AFL-CIO v. Misco,

Inc., 484 U.S. 29, 38 (1987). As this Court explained in

American Postal Workers Union v. U.S. Postal Service, an

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arbitral award does not draw its essence from the contract “[i]f

the arbitrator . . . rendered a judgment based on external legal

sources, wholly without regard to the terms of the parties’

contract.” 789 F.2d 1, 8 (D.C. Cir. 1986).

This case presents the rare circumstance in which the

Board has wholly disregarded the parties’ contract and

improperly based its arbitral award on external legal principles.

Thus, the Board’s award warrants vacatur, as the district court

concluded.

The arbitral award summarized the parties’ arguments but

then found a lack of jurisdiction based on the “fundamental

principle of jurisprudence—something that first-year law

students learn in the first semester of Civil Procedure—that

there must be a case in controversy before a lawsuit can be

filed.” J.A. 18. There was no reference to the contract in

reaching this conclusion and therefore no indication that the

Board “looked to and relied on the proper sources of [its]

authority.” U.S. Postal Serv. v. Am. Postal Workers Union, 553

F.3d 686, 695-96 (D.C. Cir. 2009). The Board failed to even

“purport to be interpreting the contract.” Madison Hotel v.

Hotel & Rest. Emps., Loc. 25, AFL-CIO, 144 F.3d 855, 859

(D.C. Cir. 1998) (en banc) (alteration omitted) (quoting Util.

Workers Union of Am., Loc. 246, AFL-CIO v. N.L.R.B., 39 F.3d

1210, 1216 (D.C. Cir. 1994)).

Instead, the Board invoked principles related to federal

courts’ subject-matter jurisdiction and Article III standing,

legal principles wholly external to the parties’ contract and

beyond the scope of the Board’s decisionmaking power. In our

reading, the Board did not simply “analogize” to federal courts’

subject-matter jurisdiction, but rather relied upon federal

jurisdiction principles to conclude that it cannot “rule on a

hypothetical set of facts that has yet to materialize,” J.A. 18.

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The award discussed a supposed “case in [sic] controversy”

requirement grounded in the “fundamental principle[s] of

jurisprudence” taught in law school, without reference to any

Board procedural rule or regulation. See J.A. 18. The Board’s

reliance on constitutional limits regarding federal courts’

subject-matter jurisdiction to decline to arbitrate the grievance

on its merits is contrary to Supreme Court precedent and

verboten under our standard of review.

In Union Pacific Railroad Co. v. Brotherhood of

Locomotive Engineers, the Supreme Court addressed the

differences between jurisdictional rules, which can never be

forfeited or waived because they affect the tribunal’s power to

hear a case, and claim-processing rules, which are forfeitable

even if obligatory and often take the form of pleading

instructions. 558 U.S. 67, 81-85 (2009). The Congress has

defined the Board’s jurisdiction to include “all disputes

between carriers and their employees ‘growing out of

grievances or out of the interpretation or application of

agreements concerning rates of pay, rules, or working

conditions.’” Id. at 82 (quoting Slocum v. Delaware, L. & W.R.

Co., 339 U.S. 239, 240 (1950)). The Supreme Court in Union

Pacific recognized that the Board may promulgate and enforce

procedural claim-processing rules but found that it has “no

authority to adopt rules of jurisdictional dimension,” meaning

that it cannot alter the jurisdiction set by statute. Id. at 84. It

follows, then, that the Board may validly decline to resolve a

grievance if it violates a procedural rule but may not decline to

do so on jurisdictional grounds if the grievance falls within the

Board’s statutory jurisdiction.

Here, the grievance was premised on a dispute over

whether the parties’ contract extended to work in the REA

Building, meaning it arose from a disagreement as to the

meaning of the contract. The matter, then, fell squarely within

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the jurisdiction the Congress assigned to the Board. See

45 U.S.C. § 153 First (i) (granting the Board jurisdiction of,

inter alia, “disputes . . . growing out of the interpretation or

application of agreements concerning rates of pay, rules, or

working conditions”).

An arbitrator may, in the course of interpreting a contract,

consider industry common law, which includes other arbitral

awards. See Transp.-Commc’n Emp. Union v. Union Pac.

R.R., 385 U.S. 157, 161 (1966); Pan Am. Airways Corp. v. Air

Line Pilots Assoc., Int’l, 206 F. Supp. 2d 12, 21 (D.D.C. 2002),

aff’d, 62 Fed. App’x 356 (D.C. Cir. 2003) (per curiam). But in

this case, the Board looked to arbitral precedent for a mistaken

jurisdictional principle, not to determine industry common law.

The cited award, Award No. 1, Public Law Board No. 1202,

appears to be a decision made on jurisdictional grounds and

does not invoke industry practice or custom. Nor does that

precedent rely on or establish a procedural claim-processing

rule. The cited award dismissed the dispute “for lack of

jurisdiction” because:

the exhibits do not serve to create an actual

dispute where none exists and thus we are called

upon to interpret and apply the agreement to

future situations whose facts and issues are not

yet known. The Board’s function is to resolve

claims arising from established or determinable

facts and issues. The confronting protest does

not present such a claim.

J.A. 90-91. But the Board does not decide the limits of its

“function”; the Congress does. See Union Pac., 558 U.S. at 84.

Because the Board cannot adopt jurisdictional rules, Award

No. 1, Public Law Board No. 1202, cannot sustain the award.

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Moreover, even when arbitrators look to industry common

law and arbitral precedent, they must do so in service of

interpreting the contract. Our court has observed that an

arbitrator “may ‘look for guidance from many sources,’” Nat’l

Postal Mail Handlers Union v. Am. Postal Workers Union, 589

F.3d 437, 443 (D.C. Cir. 2009) (quoting United Steelworkers

of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960)),

relying on Supreme Court language to that effect. The full rule

announced by the Supreme Court, however, is that the

arbitrator “may of course look for guidance from many sources,

yet his award is legitimate only so long as it draws its essence

from the collective bargaining agreement. When the

arbitrator’s words manifest an infidelity to this obligation,

courts have no choice but to refuse enforcement of the award.”

United Steelworkers of Am., 363 U.S. at 597. An arbitral award

may be affirmed if the arbitrator uses outside legal sources in

order to interpret the parties’ contract. See Pan Am., 206 F.

Supp. 2d at 21-22 (affirming arbitral award because the Board

properly “surveyed the industry common law and reviewed

other arbitration decisions applying just cause provisions” “in

an effort to inform itself and illuminate the contours of the just

cause provision” in the parties’ contract); Nat’l Postal Mail

Handlers Union, 589 F.3d at 440 (affirming arbitral award

because the Board used a “substantive background principle of

law,” the common law doctrine of continuing violations, “for

help in construing the agreement”). Conversely, an arbitral

award using legal sources unmoored from the parties’ contract

exceeds the Board’s authority, as the award “cannot simply

reflect the arbitrator’s own notions of industrial justice.”

Misco, 484 U.S. at 38.

Here, the Board relied upon principles of Article III

jurisdiction to dismiss the Union’s grievance as beyond “[t]he

Board’s jurisdiction,” J.A. 18, with no reference to the parties’

contract. Its single citation to arbitral precedent on

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jurisdictional rules—rules that the Board has no authority to

create—manifests that, far from interpreting the contract, it was

applying its own notion of industrial justice. Our standard of

review means that our inquiry boils down to “whether [the

arbitrator] interpreted the contract.” Hill, 814 F.2d at 1195.

Reviewing this arbitral award, we believe the answer is no.

In its submission to us, Amtrak advanced a position more

restrictive than even our highly limited standard of review,

contending that we must affirm the award unless either there is

an explicit indication that the Board is not engaged in contract

interpretation or, it seems, Amtrak cannot make a single non-

sanctionable argument in favor of it. See Oral Arg. Tr. 10:23-

11:3 (Amtrak counsel: “if . . . you would not sanction me for

arguing that this arbitrator was relying on those contractual

principles as opposed to an Article 3 standard or some statutory

basis, then the Court should affirm the award”). Amtrak’s

position would wholly undermine judicial review of arbitral

awards. Although the Board need not explain its reasoning at

all, a reviewing court may of course review any reasoning it

provides for its decision under the appropriate standard of

review. Amtrak’s position also elides the fact that we do have

a sufficient indication that the Board did not interpret the

contract. According to the text of the award, the Board based

its decision on the jurisprudential principle of Article III

jurisdiction, not on any contractual provision—whether

express or implied as a matter of industry common law. There

is, then, no “permissible route to the stated conclusion” that we

can glean from the award. Sargent v. Paine Webber Jackson

& Curtis, Inc., 882 F.2d 529, 532 (D.C. Cir. 1989). Vacatur is

therefore the proper remedy.

Amtrak also argues that Rule 56 of the parties’ agreement,

cited in the Union’s original claim, provides a contractual basis

for the award because it requires that grievances or claims must

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be presented “by the employee or on his behalf” within 60 days

“from the date of the occurrence on which the grievance or

claim is based.” J.A. 372. The Board, however, never

mentioned Rule 56 and neither party suggested in arbitration

that Rule 56 should be read to preclude grievances that do not

name “the employee” as somehow hypothetical. We believe

vacatur is proper here, where the Board “simply ignore[d] the

contract,” Madison Hotel, 144 F.3d at 859.

For the foregoing reasons, the judgment of the district

court vacating the arbitral award is affirmed. The case is

remanded to the district court with instructions to remand to the

National Railroad Adjustment Board for proceedings

consistent with the opinion herein.

So ordered.