Railway Labor Executives' Association v. Pittsburgh & Lake Erie Railroad Co., Interstate Commerce Commission, Intervenor

HUTCHINSON, Circuit Judge,

dissenting.

The difficulties of statutory exegesis with which the opinion for the court strug *448 gles are common and all too real in statutes affecting politically and economically potent interest groups. The understandable institutional constraints imposed on the political branches of our tripartite government often leave an ambiguous no-man’s land of conflict between different statutes affecting the same parties. As the opinion for the court recognizes, it is nevertheless our task to reconcile the differences between the statutes, if possible, and when their terms are irreconcilable, to determine as best we can the intent of Congress. See TVA v. Hill, 437 U.S. 153, 193-94 , 98 S.Ct. 2279, 2301-02 , 57 L.Ed.2d 117 (1978); Superior Oil Co. v. Andrus, 656 F.2d 33, 41-42 (3d Cir.1981).

I believe the result the court reaches directly contravenes the Staggers Act. Therefore, I respectfully dissent. The court’s opinion shows its distaste for the effects of its decision in a real world of a weakened and contracting rail industry. It nevertheless concludes that Congress’s failure to provide an express waiver of the RLA’s protracted dispute resolution procedures for ICC-approved sales of railway lines to non-carriers requires courts to let those lines bleed away their resources in a continuing status quo while hope of preserving any service, or any jobs, seeps away. I believe the RLA and the ICA are inherently contradictory in this respect and that Congress intended the ICA to prevail.

The Supreme Court has established a company’s right to sell its business without having to bargain over the decision to do so. First Nat’l Maintenance Corp. v. NLRB, 452 U.S. 666, 686 , 101 S.Ct. 2573, 2584 , 69 L.Ed.2d 318 (1981). When that decision is made primarily for economic reasons, and labor concessions can only have an incremental impact, mandatory bargaining is not required. The large, ongoing losses the record shows P & LE suffers under the status quo threaten its impending bankruptcy. That fact distinguishes Order of R.R. Telegraphers v. Chicago and North Western Rail Co., 362 U.S. 330 , 80 S.Ct. 761 , 4 L.Ed.2d 774 (1960). In Telegraphers the railroad sought only to abandon several stations and consolidate its operations. The union sought bargaining under § 6 of the RLA to amend the collective bargaining agreement by adding a new provision requiring the railroad to bargain over discontinued jobs. The Supreme Court held that the union was entitled to strike in order to compel bargaining and could not be enjoined from doing so under the Norris-LaGuardia Act.

Unlike Telegraphers, this case involves the sale of an entire rail system to a new carrier under the ICA with ICC approval. The court imposes a mandatory bargaining restraint on the decision to sell, in conflict with the Supreme Court’s bright line rule in First Nat’l Maintenance Corp. A status quo requirement contradicts the ICC’s approval of the sale of the P & LE to Railco and makes that approval obsolete. There is a distinction between allowing a union to exert economic pressure on the employer, by invoking Norris-LaGuardia’s prohibition on injunctions against strikes, and ordering mandatory bargaining in opposition to the ICC’s statutory authority under the ICA.

The imposition of RLA status quo bargaining destroys the entire ICA scheme for the expedited sale of ailing railroads to new carriers. Recent amendments to the ICA demonstrate Congress’s conclusion that the railroad industry was “over-regulated” and that this excess regulation was a substantial factor in causing the industry to fall behind in competition with other types of transportation. Convinced that changes were needed in order to save a failing industry, Congress enacted the 4-R Act and the Staggers Act of 1980 to streamline rail regulation.

Under the ICA, as so amended, Congress has provided the ICC with fifteen policies to guide the Commission in regulating the rail industry. 49 U.S.C. § 10101a. Congress sought to, restore, maintain and improve the physical and financial soundness of the rail industry, and create “a regulatory process that balances the needs of carriers, shippers, and the public.” Staggers Rail Act of 1980, Pub.L. No. 96-448, 94 Stat. 1895, § 3; see 49 U.S.C.A. § 10101a (historical note). The Supreme Court has recognized that the needs of these various interests, including labor, must be balanced with the need to keep the *449 railroads running. Chicago and North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 321 , 101 S.Ct. 1124, 1132 , 67 L.Ed.2d 258 (1981). Prohibiting the sale and maintaining the status quo until RLA bargaining procedures are exhausted largely ignores all but one of the fifteen factors, viz: labor interests.

Under the ICA, the ICC has exclusive jurisdiction over transportation by rail carriers. 49 U.S.C. § 10501 (d). 1 In contrast to the mandatory provisions for other rail transactions, such as abandonments, the imposition of labor protective conditions in the sale of railroad lines to new carriers was left by Congress to the ICC’s discretion:

The Commission may require any rail carrier proposing both to construct and operate a new railroad line pursuant to this section to provide a fair and equitable arrangement for the protection of the interests of railroad employees who may be affected thereby no less protective of and beneficial to the interests of such employees than those established pursuant to section 11347 of this title.

49 U.S.C. § 10901 (e). See RLEA v. United States, 791 F.2d 994 (2d Cir.1986) (ICC has discretion under § 10901 to impose labor protective conditions); RLEA v. ICC, 784 F.2d 959 (9th Cir.1986) (courts agree ICC has discretion within § 10901 to impose labor protective conditions in acquisition by non-carrier); Black v. ICC, 762 F.2d 106 (D.C.Cir.1985) (labor protective conditions are mandatory for § 11343 of ICA and discretionary for § 10901); RLEA v. ICC, 735 F.2d 691 (2d Cir.1984) (in passing Staggers Act Congress intended to retain ICC’s traditional policy of not imposing mandatory labor protective conditions on entire line abandonments, even though mandatory language of § 10903 appeared to apply); RLEA v. United States, 697 F.2d 285 (10th Cir.1983) (per curiam) (labor protective conditions can only be imposed on vendor/abandoning carrier and not upon acquiring non-carrier under § 10901); Simmons v. ICC, 697 F.2d 326 (D.C.Cir.1982) (Congress, in recognizing need to abandon competing regulatory policies in abandonment cases, left traditional ICC labor policies largely untouched in 4-R and Staggers Acts); In re Chicago, Milwaukee, St. Paul & Pacific R.R. Co., 658 F.2d 1149 (7th Cir.1981) (labor protective conditions may only be imposed on vendor/abandoning carrier and not on acquiring non-carrier under § 10901), cert. denied, 455 U.S. 1000 , 102 S.Ct. 1632 , 71 L.Ed.2d 867 (1982).

Congress also gave the ICC power to exempt transactions from the ICA if regulation would not further the transportation policy embodied in § 10101a and there was no threat to shippers of an abuse of market power. 49 U.S.C. § 10505 (a). If the ICC finds that application of the ICA becomes necessary, it can revoke the exemption. 49 U.S.C. § 10505 (d). The ICC may not “relieve a carrier of its obligation to protect the interests of employees as required by this [Act]” in granting an exemption. 49 U.S.C. § 10505 (g)(2).

The unions have failed in their attempts to persuade Congress to amend the ICA to include mandatory labor protections. See H.R. Conf.Rep. No. 1012, 99th Cong., 2d Sess. 250, reprinted in 1986 U.S. Code Cong. & Admin.News 3868, 3895; Railroad Transportation Policy Act of 1979: Hearings Before the Committee on Commerce, Science, and Transportation on S. 1946, 96th Cong., 1st Sess. 536, 539 (1979) (hereinafter Hearings) (statement of J.R. Snyder, Chairman, Legislative Committee, RLEA and National Legislative Director, UTU) (requesting that mandatory labor protections of § 10903(b)(2) be applied to abandonment and entry provisions in S. 1946); 2 see also RLEA v. ICC, 784 F.2d 959, 965 (9th Cir.1986) (discussing Congress’s failure to amend ICA).

Where Congress deemed labor protection necessary, it expressly provided for it. See, e.g., 11 U.S.C. §§ 1170 , 1172(b); 42 *450 U.S.C. §§ 10903 (b)(2), 11347. Given Congress’s failure to amend the ICA, it is reasonable to infer that Congress did not intend to impose mandatory labor protective conditions in other sections. RLEA v. United States, 791 F.2d 994 , 1002 (2d Cir.1986); Simmons v. ICC, 760 F.2d 126, 130 (7th Cir.1985), cert. denied, 474 U.S. 1055 , 106 S.Ct. 791 , 88 L.Ed.2d 769 (1986).

Until today, the judiciary has not tolerated collateral attacks on ICC-approved aban-donments. 3 See United Transp. Union v. Norfolk and Western Ry. Co., 822 F.2d 1114 (D.C.Cir.1987) (union RLA-based attack on arbitral award was in reality challenge to ICC order), cert. denied, — U.S. -, 108 S.Ct. 700 , 98 L.Ed.2d 651 (1988); RLEA v. Staten Island R.R. Corp., 792 F.2d 7 (2d Cir.1986) (ICC decision ordering sale of lines under § 10905’s “forced sale” provisions could not be collaterally attacked by union’s invocation of RLA procedures), ce rt. denied, — U.S. -, 107 S.Ct. 927 , 93 L.Ed.2d 978 (1987); Brotherhood of Locomotive Engineers v. Boston & Maine Corp., 788 F.2d 794 (1st Cir.) (RLA status quo injunction would be collateral attack on ICC’s approval of § 10505 exemption from ICA of lease of lines to another railroad), cert. denied, — U.S. -, 107 S.Ct. 111 , 93 L.Ed.2d 59 (1986); Chicago & North Western Transp. Co. v. RLEA, No. 88-444 (N.D.Ill. March 16, 1988) (applying Staten Island in refusing to enjoin ICC-approved sale and enjoining union strike based on finding that dispute was “minor” within RLA); RLEA v. City of Galveston, No. 87-359 (S.D.Tex. Nov. 4, 1987) (RLEA request for injunction based on § 6 of RLA dismissed under Fed.R. Civ.P. 12(b)(6) because of ICC order); United Transp. Union v. Burlington Northern R.R., 672 F.Supp. 1579 (D.Mont.1987) (any RLA injunction would directly interfere with ICC’s grant of exemption to sale under § 10505); Decker v. CSX Transp., Inc., 672 F.Supp. 674 (W.D.N.Y.1987) (complaint dismissed under Fed.R.Civ.P. 12(b)(6) because district court was unable to grant requested RLA relief without interfering with ICC order exempting railroad sale from § 10901 requirements). See also B.F. Goodrich Co. v. Northwest Indus., Inc., 424 F.2d 1349 , 1352-54 (3d Cir.) (ICC decision sanctioning divestiture plan could not be collaterally attacked in district court, “so long as the practical effect of a successful suit would contradict or countermand a Commission order”), cert. denied, 400 U.S. 822 , 91 S.Ct. 41 , 27 L.Ed.2d 50 (1970). Courts of appeals have exclusive jurisdiction over review of ICC orders. 28 U.S.C. §§ 2321 , 2342. RLEA has an avenue for review of an ICC order in such a court. See, e.g., RLEA v. United States, 811 F.2d 1327 (9th Cir.1987) (review'of ICC’s denial of labor protective conditions on § 10901 sale). By “artfully wording” its pleadings, RLEA here is circumventing the avenue Congress has prescribed to appeal ICC denials of labor protective conditions. See Kalo Brick & Tile Co., 450 U.S. at 324 , 101 S.Ct. at 1133 (1981) (“It is difficult to escape the conclusion that the instant litigation represents little more than an attempt by a disappointed shipper to gain from [a state court] the relief it was denied by the Commission.”).

The underlying reason for this RLA challenge is the ICC’s repeated refusal to im *451 pose labor protective conditions in § 10901 transactions, as evidenced by its rulemak-ing in Ex Parte 392. It strikes me as strange that the ICC has effectively denied labor protection in all § 10901 transactions, and that no union has ever been able to make the exceptional showing required by Ex Parte 392. See RLEA v. Pittsburgh & Lake Erie R.R., 831 F.2d 1231, 1235 (3d Cir.1987). One would think that in at least an occasional case, labor could and should be given protection to insure a “fair and equitable arrangement.” That protection could be given without imposing a total status quo obligation on the railroads and obviating the purpose and goals of the 4-R and Staggers Acts. Appropriate regulatory consideration of labor’s interests would avoid the “Catch-22” of potential job destruction that full maintenance of the status quo entails. The perception by rail workers of ICC failure to consider labor’s legitimate interests removes the middle ground and leaves us isolated at unbridgeable extremes.

Employees may well have certain vested rights which should attach to the proceeds of a sale. As labor perceives the ICC’s position, they seem entitled to nothing. However, requiring exhaustion of RLA procedures leaves both employees and employers nothing, because the RLA status quo requirement practically guarantees the death of a near-bankrupt rail company. See Staten Island, 792 F.2d at 12 (since purpose of RLA is to ensure continued furnishing of railroad services to public, RLA does not authorize status quo if railroad can no longer provide rail service).

The RLEA’s appropriate remedy in this case was appeal of the ICC’s denial of labor protective conditions. 4 See RLEA v. United States, 811 F.2d 1327 (9th Cir.1987) (remanded to ICC to permit RLEA to petition for revocation under § 10505(d) of denial of labor protective conditions). I note that RLEA’s petition for revocation, filed October 2, 1987, is still pending and that on October 13, 1987 the ICC ordered P & LE to maintain its corporate existence until that petition was acted upon. If the ICC denies the petition, RLEA is free to voice its complaints regarding Ex Parte 392 to the appropriate court of appeals. In addition, the union is entitled to resort to economic self-help to gain whatever bargaining advantages it can from P & LE. See Pittsburgh & Lake Erie R.R., 831 F.2d at 1237 . That test of wills, which imposes penalties on both parties, seems to me more likely to concentrate their attention in the face of the demise of both jobs and rail lines than the narcotic influence of maintaining benefits hard-won in the industry’s earlier, healthier days.

For these reasons, I would vacate the district court’s order granting summary judgment to the union and ordering P & LE to bargain under the RLA, and remand with instructions to dismiss.

. State authorities also have exclusive jurisdiction over rail carriers to the extent authorized under the ICA. 49 U.S.C. § 10501 (d).

. During the hearings, Mr. Snyder commented: Much of the savings to be achieved as [a] result ... will be made at the expense of the employees of the industry in terms of job abolishments and transfers. The railroad employee should be at least a partial beneficiary along with his employer of the fruits of this legislation. He must not be made its victim.

Hearings, supra at 539.

*450 H.R. 3332, 100th Cong., 1st Sess. (1987), currently pending before the House of Representatives Committee on Energy and Commerce, would amend the ICA to explicitly provide that the ICA does not preempt union rights under the RLA.

. In RLEA v. Pittsburgh & Lake Erie R.R., 831 F.2d 1231 (3d Cir.1987), we held that the district court was without jurisdiction to enjoin a labor strike under the Norris-LaGuardia Act, 29 U.S. C. §§ 101-115. Although our opinion in that case intimated that RLA dispute mechanisms should not be subordinated to the ICA, it has been cited in support of the dismissal of a union RLA-based attempt to collaterally attack an ICC exemption under § 10505. Decker v. CSX Transp., Inc., 672 F.Supp. 674, 678-79 (W.D.N.Y.1987). Our opinion was distinguished in United Transp. Union v. Burlington Northern R.R., 672 F.Supp. 1579 (D.Mont.1987) from an injunction of an ICC-approved sale, which would constitute a direct attack on an ICC order, as opposed to enjoining a union strike against an employer: "A strike by union members against their employer does not directly contradict or encroach upon the authority of the ICC. The authorization of the sale still stands, and at the same time the employees have the right to pressure the employer to negotiate labor protections.” 672 F.Supp. at 1583 n. 3. I believe that this distinction is correct and that our earlier opinion in this case should be so construed.

. RLEA’s argument that placing exclusive jurisdiction over labor protective conditions in the ICC amounts to an implied repealer of RLA does not adequately consider the pre-1983 history of the industry and the uniform practice of both labor and management in referring the question of labor protective conditions to the ICC in acquisitions, abandonments and consolidations of service prior to passage of the 4-R and Staggers Acts. I believe the parties’ longstanding practice under the statutes in question is relevant to legislative intent. What has changed is not the statute or the ICC’s authority, but its policy as evidenced by Ex Parte 392 and the attempts to get around it by using RLA § 6 procedures to attack ICC § 10505 exemptions.