Jurisdictional Statement — Transit Union v. United States

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4 Washington,. D. C. 20005 |

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itiPa et COURT, Ue Aa; Offiee-Supreme Court, US. —

es ies BILED..|

\ AUG 29 1966 eos

| ) VIS, cLERK

iN THE JOHN F. DAVIS, C ae ea

Supreme Court of the United States a ee

Ocroser THM, 1966 4 } \- 4

va e |

# No. 4 G 6

AMALGAMATED TRANSIT Untow, “AFL-CIO, A ppellgnt ‘ - t 4

v. ee ree. ‘

UnItep STATES oF AMERICA and INTERSTATE

CoMMERCE CoMMIssIoON, Appellees,

and

Amentoan BUSLINES, ‘Ino. and ein ax ASSOCIATION

+ OF Motor Bus Ownnns, Intervenor-Appellees.

On Appeal From The United States District Court |

dees the District of Columbia

JURISDICTIONAL STATEMENT

HERMAN STERNSTEIN |

WiuiaM B. Peer. . pe soe

1155 15th Street, N. W.

Washington, D. C. 20005 - .

Attorneys for Appellant °

‘= ZIMRING, GROMFINE and STERNSTEIN.

1155 15th Street, N.. W.

Of Counsel

' Purss or Byron S. ADAMS Provrine, Inc., WASHINGTON, D.C.

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_ I J. Gromrine_—_.--_—— SS

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‘TABLE OF CONTENTS

ee 3 Page

Jurisdictional Statement-.............. ener e |

Opinions Below ...........,...0008- cued pens 2

ES eer SRR OawAeneees jaeare, |

Statutes Involved .........:...eeeeee. Pesto aie

Questions: Presented ........ eee evecccess 8

Statement of the Case .. TE ern fx " ieowees 4

Introduction .......... COE TE ere te OO OE a a

' The Transfer Proceeding Before The Commission — 4.

Amalgamated’s Petition To Reopen The Record and

Commission Hearings Thereon ....... Sc ——

Amalgamated’s Proposed Conditions and The Com-

mission’s ‘Denial Thereof 7..............000:- - i

Judicial Review of Commission’s Decision and |

. -» Remand to The Commission .................. ee

The Judgment From Which This Appeal Is Taken 13

The Questions Presented Are Substantial .......... 14.

WRU 5 6c iciversssany st iteaenas 14

1. The Statutory © Requirement of a - Parity of

‘OE Sasce conga eRe uankecacvcseees as ae

2. The ‘Constitutionality of Section eae en nv ae

Conclusion ...‘..... LARS SESS REARS DECADES CaRenes . 31

APPENDICES: ; 3 | =

A. The Decision of hs Court NE si Nisisscue “la

B. The Decision of .the Commission, 97 M.C.C. 6 8a

C. "The Statutes Involved :..........0.005 Sees 32a

»: ,

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Pp

tf

vi ;

“i r a _ Contents Continued

_ AUTHORITIES orpip oe

CasEs:_ | a Page.

Amalgamated Association v. ‘United States, 221 F.

Supp, 958 (D-D.C. 1968) ......0...s0-peccerees 11,26

Baggett Transportation Co —Purchase—Hunt Freight .

' Brotherhood o

ines, -Inc., 75 M.C.C. 147. foe kes a Sew .

Bolling v. er 347 U.S. 497

Maintenance’ of Way Employes v.

United States, 366 U.S. 169 (1961) .......... 2, 10,16

Burlington Truck Lines v. United States, 371 U.S. 156

| RN aes M ERP ME oe eo dd 26

| Chicago, Burlington and Quine Ry. Co. Abandonment,

Be GR Ee OED nn eon ccc tqenvata se cvees

Chicago & North Western Railway Co. Merger, 261

I EE errr e rere eee e eee 5.

Chicago, Rock Island & Gulf Railway Co. Trustees

‘Lease, 230 1.C.C, 181 (1938) ....:......-...0:. 16

~ Coordination of Motor Transportation, 182 1.0.C, 263

Interstate Commerce Commission v. IT Transport

We gk Te ee ore 26

Interstate Commerce Commission v: Railway Labor

Executives’ Association; 315 U.S. 373 (1948) . 2

. Motor Bus and Motor Truck Operation, 140 1.C. C. 685 |

EE SGC Sle Cea dcdensb hed eat abcde sa veakas 00:3 18 —

Ohio Bell Telephone v. PUC, 301 U.S. 292 ( 1937) . 24.

EER ere er Peet ee ee eee » 18,19 |

The Greyhound Corp _—Control—Southeastern Grey-

hound, 57 M.C. ce > 2a be 16.

Hudson Bus Lines—Conttol—Boston & Maine Trans-

portation .Co.; 58 M.C.C. 133 (1951) .......... 19

Indiana Motor. Bus Co .—Purchase—Chicago, South

Shore and South Bend R.R., — M.C.C, —, Docket

Noe MC-F-8122 (1963) 2... cece cece ccccoveees 16 .

Oklahoma Ry. Co. Trustees Abandonment, 257 I. OC.

Pe 5 Eee eee 10

Overnite Transportation Co. _"Purchase—Putherford

Freight Lines, Inc., 97 M.C.C. 568 (1966) -. 0.5... 16

Railway Labor Executives’ Association v. United ° =f

States, — koe a 8) a ee

Schneider.v. Rusk; 377 U.S. 163 (1964) ....... pera 22

Short Line, Ine. -_Purchase—New England Transp.

Co. 77 M.C.0, 83 (1958) ..........0..+ee0e. 16, 19, 20

.

Fe ae A ily ot

Contents Continued oe hii

Southern Railway Co.—Controf—Central of Georgia

United States v. Petrillo, 382 U.S.-1 (1947) ........

Srarures **. Pe: ee

Interstate Commerce Aci, 49 U.S.C. §1 et seg. >

Section 5(2)(b) Heotensteecea teas ee eag BBL BB

MO IO, Sih i ic ccuaucbcsces deca 2, 3,20, 21° :

_ Section 5(2)(f) .f.u... imei ans Vevdus Geaeaee , 20, 21

Section 5(4)(b), 48 Stat. 217-...............0.05.

Section 17(11) ........ SePeRRKhRKeeeak ees keener ae

| Motor Carrier Act of 1935, 49 Stat. 543.......... ...18-19 .

SI enka Bus bid eer ce cn dca Seats 19

. BSeotion 213 °......,....4. EE OR errr’ 19

United States Code. Annotated .

Pelee OB, Bodiien 1908 * sf cs is ccssse ee 3

I I I cess cccisdonvedacecces a

Title 28, Section 1398 ...... iwuawe Kaeeaaas veer 2

«Title 28, Section 2284 ........ ‘Lats eieesathieeses.: aa

Title: 28, Sections i. beekdekene ls ae

CONGRESSIONAL MATERIAL: ‘ |

Eastman, Report of the Federal Coordinator of Tranms-

portation, 1934, B.R. Doc. No. 89, 74th Cong. Ist

‘Sess. (1935) ......... Seca PANE ES banhehikee des 18

Hearings on 8S. 1629 Before the Senate Committee on :

Interstate Commerce, 74th Cong. 1st Sess. (1934)

. 18, 19

_S, Rep. No. 482, 74th Cong. Ist Sess. S| eer .. 18

MISCELLANEOUS:

Brief of the United’ States and Interstate Commerce

Commission in Brotherhood of Maintenance of

| Way Employes v. United States, 366 U.S. 169 -

SEE Aah haads ey hee ctiksteeeitansenascee 26

MT CHM sos cn sane: Pele iaess ec ca ons 18

Page |

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, IN THE

_Srorene Court of the Huiten States |

OcrosEr TERM, 1966

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AMALGAMATED TRANSIT Union, AFL-CIO, Appellant

paige eres - 1 : ,

‘Unrrep States or AMERICA and INTERSTATE

COMMERCE CoMMISSION, Appellees,

AMERICAN BusLiNEs, INC., and NATIONAL ASSOCIATION

or Motor. Bus Owners, Intervenor-A ppellees, -

- On Appeal From The United States: District Court

For the District of Columbia ,

JURISDICTIONAL STATEMENT

Appellant appeals from the judgment of the United

States District Court for the District of Columbia,

_ elitered on May 4, 1966, which affirmed an ordér of the -

Interstate Commerce Coimmission: and -submit¥ this

Statement to show that the Supreme Court of fhe

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Uniteh States has jurisdiction of tle apptal and that’ -

substantial questions are presented. !

You "OPINIONS BELOW >

The opinion of the court below is reported at 253 F.

Supp. 481, and it may be found as Appendix A. attached

hereto. The two opinions of the Interstate Commerce

Commission involved herein are reported at 90 M.C.C.

.173 (1962), and 97 M.C.C. 426 (1964), the latter of ©

which is i. oe hereto as Appendix B.

ar JURISDICTION ,

This suit was brought under 28 U.S.C.A. Sections

1336, 1398, 2321-2325, and 2284, to set aside and vacate

an order of the Interstate Commerce Commisgion. The

judgment of the three-judge District Court was entered

on May 4, 1966, and the notice of appeal was filed in

_ that court on Jung 30, 1966.- The jurisdiction of the

Supreme Court to review this decision by direct appeal

is conferred. by 28 U.8.C.A. Section 1253. The follow-

ing decisions sustain the jurisdiction of this Court to

review the judgment of the District Court: Brother-

_hood of Maintenance of Way “Employes v, United

States, 366 U.S. 169 (1961) ; Railway Labor Executives’

Association v. United States, 339 U-S. 142 (1950) ; In-

terstate Commerce Commission v. Railway Labor Ex-

cutives’ Association, 315 U.S. 373 (1943) ; and United

States va. Lowden, 308 U.S. 225 (1989).

ap a _ STATUTES INVOLVED °

The statutory provisions involved in this appeal are _

Sections 5(2)(b), (ec) and ‘(f) of the Interstate Com-

merce Act, 49 U.8.C.A. Sections 5(2)(b), (ce), and (f).

The provisions are attached hereto as Appendix C

POR TS oR ET oe

| | QUESTIONS PRESENTED F

(i) Did the court below err:in upholding the Com-

a YT

mission’s interpretation’ of Section 5€2)(c) of the .

Interstate Commerce Act, which interpretation denies

to motor carrier employees adversly affected by a Sec-

tion 5 transaction protective /conditions that have

regularly been considered as n&écessary to the fair —

equitable treatment of the interests of railros m- -

ployees suffering the idemttical adverse effe

(2) Did the court, below err in failing to conclude

that Section 5(2)(¢) of. the Act; as interpreted and

‘applied by the Commission in this case violates thé Due

‘Process Clause of the Fifth Amendment of the Con-

stitution of the United States and is unconstitutional,

for the reason that the Section arbitrarily and capri-_ .

ciously classifies motor carrier employees, and effects

tion afforded against losses incurred as 4 result of the —

transfer of motor carrier operating rights under Sec

tion 5 of the Act?

(3) Does the decision and ilies of the court

below violate the Due Pcess Clause of the Fifth

Amendment of the Constitution of the United States in

that the decision an} judgment is void of any findings

based upon evidence of record, and that the decision

‘and judgment is instead premised on matters de hors

the record which were yever presented to the Oom-

mission, were not relied Tipon by the Commission and

which Appellant was not afforded the en to

meet, rebut or answer?

(4) Did the court below err in failing to conclude

that the Commission arbttrafily and capriciously relied

4

- invidious discrimination against. them in the protec-.

_ upon the same ground previously relied upon and deter- ©

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. mined adversely to it by a three-judge District Court

in a prior appeal, to deny protective conditions against

the loss of wages and reduction in earnings suffered .

by the employees ? ‘

(5) Did the court below err in failing to conclude

that thé Commission’s findings against the need for

comprehensive employee. protective conditions were

without any basis in the record, arbitrary and capri-

cious, and contrary to law? |

STATEMENT OF THE CASE

Introduction.

This case involves a denial by the Interstate Com-

merce Conimission of employee protective’ Gonditions

in a motor carrier transfer proceeding under Section

5(2) of the Interstate Commerce Act, 49 U.S.C.A. sec.

5(2). Appellant Amalgamated Transit Union, AFL-

CIO (sometimes referred to hereinafter as ‘“Amalga-

mated”’), asthe bargaining representative of the bus

' drivers affected, sought from the Commission the same

_ measure of protection for the employees as the Com- ~

mission has customarily afforded railroad employees

adversely affected in the same ways. The Commission

has refused to grant the protection requested. Because

of this refusal the employees have suffered losses in

wages, reduction in earnings, additional moving costs

and living expenses, and other burdens, against which

they are unprotected.

The Transfer Proceeding Before The Commission

This case began on November 18, 1958, when Ameri-

ean Buslines, Inc., made application to the Commission

for approval under Section 5(2) of the Act to sell and

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‘transfer certain of its operating rights to two other ie

carriers, Midwest Buslines, Inc.,- and- Continental

Tehnessee Lines, Inc. Amalgamated, on behalf of the

bus drivers represented on American, intervened in the

Commission proceedings under autliority of Section

17(11) of the Act, 49 U.S.C.A. see. 17(11). Amalga-

* mated argued, inter alia, that if the application were

approved, the Commission should impose, a8 a condition

to the approval of the transfer, certain provisions for

the protection of the employees whose jobs were being .

transferred to the other carriers, including provisions

. protecting them from loss of earnings resulting. from

displacement, monthly allowances for dismissed em-

ployees, and severance allowances, all in accordance

with the Commission’s regular practice in railroad

cases*under Section 5.

After hearings were ‘held on the application, first

a Hearing Examiner and then the Commission on

November 12, 1959, granted the application but denied

the specific protective conditions requested by Amalga-

mated. Instead, a three year “‘reservation of juris-

diction’? was imposed by. the Commission in order to

rive Amalgamated the opportunity to establish sub-

sequently\that the bus drivers had suffered adversly

from the’ approved transaction. See 80 M.C.O. 681

(1959). |

1 At the time of the hearing before the Hearing Examiner, the

American drivers. were on strike against American. Thus, it could

not be readily determined what adverse effects they would suffer

if and when they returned to work with American after the sale

of the routes. The Commission has commonly imposed similar

“‘reservations’’ in motpr carrier cases, and until 1946, the Com-

mission had also done so in railroad cases. See Chicago & North- ~

western Railway Merger, 261 1.C.C. 672, 675 (1946).

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Amalgamated’s Petition To Reopen The Record and

Commission Hearings Thereon

On April 11, 1960 Amalgamated requested that the

Commision reopen the record, that further hearings

be held and that specific conditions be imposed for the .

protection of the employees. This petition was granted

by the Commission and in J anuary, 1961, hearings were

held.

At thé hearings before the Commission, Amalga-

mated’s proof established the following facts concern-

‘ing-the adverse effects suffered by the American bus

drivers: | |

Prior to the sale and transfer of American’ s operat-

ing rights to Midwest and Continental, American had

employed 41 drivers on the routes at issue. With the

sale consummated, and 41 fewer jobs available ‘with

American, 22 drivers who had lost their jobs exercised |

their master seniority with American and obtained new

: assigriments elsewhere on American. In.so doing, these —

22 drivers displaced or.“‘bumped’’ other less ‘senior =

drivers who, in_turn, ‘‘bumped’’ other: junior “drivers

into new assignments. Amalgamated introduced into

evidence before the Commission eleven exhibits de-

picting the. earnings of drivers both before and after

displacement, in order to illustrate the losses in earn-

ings sustained. These statistical comparisons showed

that the drivers, in many months after being displaced

and after locating new assignments, earned substan-

tially less than their average monthly earnings had been

before displacement.

Many of the drivers affected had been ‘employed by

American in what was known as the ‘‘southern senior-

7

ity district”, which was completely eliminated with

the sale of the routes involved. Each of these drivers

fost his employment in that district and had to move

to American’s ‘‘eastern seniority district’ to remain

employed. For some of these drivers, the first assign-

“ments available in the eastern district were lower-pay-

ing and irregular extra-board work.. For others, even

the availability of regular assignments did not assure

equivalent earnings, and they earned less in many

months than they had averaged before.

Of the 22 drivers, others had been employed in

American’s ‘‘central seniority district’”’ prior to the

sale. .Because some assignments still existed in this

district after the sale, and because they still had a>

home seniority district in which to bid, these drivers

were restricted in securing assignments in the eastern

district. Before these drivers could bid into the east-

ern district, they had to be in furlough status in the

central district. Then if, once having secured an as-

signment in the eastern district, a job reopened in the

~. central district which they were eligible to bid, the

drivers had to return to the central arninict or forfeit

all seniority rights.

Many of the central drivers did acquire aan |

status and bid into the eastern district in search of

hetter paying, more secure work. However, soon there-

after, jobs again reopened in the central district and

_ they were forced to return. Amalgamated’s evidenice

showed the results of these moves: for example, in one

case the driver earned after the sale of the routes what‘

he had averaged before in only three of the twelve

months analyzed. For another, in only two of the

twelve months studied was the driver able to earn what

he had averaged before and, in one of those months, he

8.

had to drive more than 4,000 niore miles than he had

previously averaged in order to achieve the higher earn-

ing level.

Testimony from the drivers themselves was also prof- :

fered by Amalgamated. Mr. Elmgre’s testimony may

be cited as illustrative.’ Before the sale .of -his route,

Mr. Elmoreheld down a regular run in the central dis-

trict. He aad his wife lived in a home they rented in

Springfield, Missouri. When Mr. Elmore returned to

work following the sale, he was unable t hold an

assignment because he was continually ‘‘bumped’’ by

more senior drivers. Finally he was furloughed in

‘the central district and, in November, 1959, he was able —

to bid into the eastern district on a regular run. -He

worked in the eastern district until the end of Juge,

1960, when he was recalled to the central district where

he had to’ take an extra-board saspavaie in Big

Springs, Texas.

Mr. El)more testified that for the first two months.

of his employment in the easterti district, his wife

remained in Springfield, Missouri, because he was un-

certain of the duration of his eastern district assign-

raent. During :these two months, he shared a hotel

room in Pittsburgh, Pa. with several other displaced -

drivers. Subsequently, Mr. Elmore’s wife joined him

and they rented an apartment in Pittsburgh. Then,.

when he was recalled to the central district, he and

his wife moved to an apartment i in Big Springs, Texas,

civing up their home in Springfteld. Mr. Elmore’s

total wage loss for this period was $243.49. This doés

not include the $112. 05 in wages lost while moving

from Pittsburgh to Big Springs. His new accommoda-—

tions cost him $12.50 more per month than he had paid

in Springfield. He also incurred expenses in moving

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his wife and household furnishings to the different

locations.

Amalgamated, in presenting its evidenice of adverse

effects, did so on the theory that under Section 5(2)

of the Act, motor carrier employees are entitled to the

.same measure of protection as the Commission: has

held to be ‘‘fair and equitable’’ for railroad employees

. under similar adverse circumstances. Accordingly,

Amalgamated had tailored its proof to the Commission

to demonstrate the likenesses between the losses in

- earnings, moving expenses and additional living costs

incurred by motor carrier employees, and those incur-

red by railroad employees in similar Section 5 cases.

Amalgamated proceeded on the assumption that if the

needs of the two Passes of employees are indistinguish-

able, and unless good cause can‘be presented for treat-

ing each* class differently, thén no reason appears for

imposing in motor carrier cases conditions less protec-

tive than those ordinarily —? in railroad cases.

(

‘ Amalgamated’s Secnindl Conditions and The

- Commission's Denial Thereof

eer the close of the earings before the Commission,

briefs were submitted by the. several parties. In its”

brief Amalgamated set forth in detail the-conditions

it proposed: to protect against the adverse effects sus-

tained by the employees as established in the record.

$(1). For employees who retained employment status

but who were displaced from their former jobs, .

a monthly ‘‘displacement allowance’’ was to be -

paid if their actual monthly earnings in the new

. ‘job were below the average earnings in the old.

Job; re ree

arn. 20

@: ‘For dismissed eaten those wae lost their

jobs: entirely, either a monthly ‘‘dismissal allow-

ance,’’ equal to the displacement allowance, or a

- lump sum “separation allowance’’ based upon

length of service would be paid; \

(3) ‘Protective conditions insuring against losses -

sustained in the sale of real estate, broken leases,

and for reimbursement of moving and other ex-

penses ; and

\ (4) arbitration procedures to dition pone aris-

ing out of the application of seis acimemaea’ 7

conditions.”

In Mer, 1961, a Hearing Peasinos ere the —

Amalgamated’s request for a specific set of employee

protective conditions. The Examiner found that

drivers had in fact suffered -adverse effects but he

held that these adverse effects were not those against

which the Commission, under “the established policy

in motor bus eases,’’ had provided protection. On ap-

peal to the Commission, the Commission in March, 1962,

affirmed | the Examiner’ 8 Report. See 9) M.C.C. 173.

‘8 ‘Amalgamated’ 8 — formula of protective conditions was

based on three sets of railroad conditions: (1) the Washington

Agreement of 1936, see United States v. Lowden, 308 U.S. 225

(1939) ; Brotherhood of Maintenance of Way Employes v. United ©

States, 366 U.S..169, 173 (1961) ; (2) the **Oklahoma Formula,’’

see Oklahoma Ry. Co. Trustees Abandonment, 257 I.C.C. 177, 179

(1944); and (3) the ‘‘Burlington Conditions,’’ see Chicago,

Burlington and Quincy Ry. Co. en, 257 1.C.C. 700,

704 (1944).

~* Amalgamated’s rend jmuiiinees appear at 90 M.C.C. at 188-

192 (1962). An analytical comparison betwéen these conditions,

and the railroad conditions from ‘which they were derived, ap-

pears at pp. 38-46 of Amalgamated’s Brief to the Hearing

_ Examiner, February 27, 1961, which brief is a part of the original

record before this Court.

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Judicial Review of Commission's Decialon asd

Remand to the Commission

‘Thereafter, Amalgamated brought suit-to set aside

and vacate the order of the Commission to the extent

that protective conditions were denied to the drivers

adversely affe¢ted.. By order and judgment dated

' August -2, 1963, a unanimous three-judge District

Court for the District of Columbia set aside the Com-

- mission’s order, and remanded the case for further |

- proceedings. Amalgamated Association v. United

' - States, 221 F. Supp. 958...

In thé order vacated by the Court, the Couimninsion

had relied upon three’ separate and’ independent

grounds, including a finding that the drivers had re-

fused to avail themselves of alternative employment

with American after the - sale, . and had, therefore,

brought the injuries upon themselves as a matter of.

their own free ‘‘choice.’? 90 M.C.C. at 187. However, -

- on appeal, the Court disagreed, and held ‘‘the grounds —

on which the Commission relied in denying relief were

accordingly erroneous.’’ 22]. F. Supp. at 961.. With

— respect to Amalgamated’s claim that motor carrier

_- employees are entitled te*the same measure of: protec- ;

- tiori as railroad employees, the Court held:

‘“‘But we think that if any particular.measure of |

relief is one which would ordinarily be granted to

railroad workers similarly situated, the Commis-

sion should not deny it to the employees of Ameri-—

can Buslines, Inc., without a reasoned explana-

tion of its denial, consistent with what has here

been said.’? 221 F. Supp. at 961. :

_Dpon remand, the Commission reopened the : mat-

ter ‘‘for reconsideration on the record as made.” No

further hearings were held, and. no additional testi-

3B.

12

mony was taken or evidence received. Qn August ®

- 1964, the Commission rendered its decision which is

ene at 97 M.C. i 426, and i is sét forth in Appendix

B, infra.

| In this latest decision, the Commission ‘again re-

fused to condition its order upon the conditions pro-

- posed by Amalgamated. Because of the Commission’s

treatment of the case at this point, the issues may be .

oe. into three separate categories.

First, for the drivers who had to accept poorer pay-

ee ing and irregular assignments elsewhere with Ameri- .

can, the Commission made no provision whatever for

- their losses in earnings. This was because, the Com-.

mission held, ‘‘the lesser-wages . . . resulted from their

own choice not to aceept employment paying more than

they were then earning” with American. 97 . |

at 439. This is‘precisely the same ground reli

previously by the Commission, and one:of the re&Soris

' _. yajected by the Court as inadequate and erroneous fh ).

the first appeal. , ~

Second, for the less senjor drivers who- had been .

‘‘bumped’’ by one of the 22 other drivers, the Com-

missior® found it ‘‘ymnec¢ssary and inappropriate to

provide, benefits t6 them’’ because “‘the adverse effect,

if any, seems impossible to ascertain, minor ‘in extent

and difficult to attribute to this transaction. oie

MCC. at 441 n.'6.

Third, the only protective condition Papoeed by the

‘Commission was oné p oviding ‘‘a Tump-sum payment.

approximately. equal. to the cost incurred in moving .

their households.” his proviso was drastically lim-

_ . ited in that it was ‘effective for only one year, and be-_

‘eause it contained no provision for losses sustained in.

the sale of real estate, or for en costs inthe

forced termination of leases.

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The ‘Jadgindas from ‘Which This Appeal Is Taken

Both American and Amalgamated sued to set aside

agd vacate the Commission’s latest.order; with Ameri- -

can and the Natiorial Association of Motor Bus Owners |

being granted leave to intervene in Amalgamated’s ©. |

suit. Amalgamated’s basic clai was that the drivers.

were entitled to the same measuterof protection. rail- |

road employees, would have received sinder the same.

circumstances, and that the Commission had flouted —

the Court’s directive by failing to give a ‘“‘reasoned:

- €xplanation’’ why

' granted this _relie nalgamated’s brief to ‘the

coyrt established how the Commission’s order deviated

- from the course which would have been followed in a

railroad . case, and that the pfotection which was

granted was tantly ge that accordéd rail-

road employees similarly situated. Amalgamated |

also showed that. the Commission had, with tespect to

the first category, reiterated a. ground relied upon.

- previously. and rejected, and that the Commission’s

findings not only lacked Support in the > record, but

were contrary to the record and based on matters’ de

hors the. record. ; ¢=

A three-judge Court iia, the order of the Com-: |

mission on employee’ protection.” The Court held that

the standard of what is ‘‘fair and equitable”’ for motor

carrier employees is not to. be found in what\is, fair

| 8 After the Anterican and. Amalgamated suits had been filed, the

- Initernational. Brotherhood of Teamsters filed an action against

the Commission, ‘C.A. 894-65, in the sane court, and: raised issues .

concerning the protection accorded truck drivers adversely’ .

affected by transfer proceedings under Section 5 of the Act similar

to those raised herein. That action was consolidated with .the

_ other. two suits, and the single opinion .rendered by ‘the court

éovers all three stiits. We are advised by counsel that an appeal

has beem taken in that action also and that a Jurisdictional State-

ar ah ese by, the iBT in this Court presently;

at. J . > . ’ é °

a

otor, carrier employees were not

14

and equitable for veltpeatt employees, that the Com-

yaission is not required under Section 5 of the Act to

follow the railroad conditions as a guide to the pro-

tection given motor carrier employees, and that the

‘Commission’s policy of distinguishing: between the

two classes of employees is supported by a rational

basis. In an effort to support these conclusions, the

Court found that the needs of motor carrier employees |

are not as, great or as pressing as those of railroad

employees, and therefore less protection for’bus drivers

is ‘permissible. It is from this decision and judgment

of the court below that this appeal is. taken.

THE QUESTIONS PRESENTED ARE SUBSTANTIAL

The primary issue in this case is on? which goes

to the basic philosophy behind the Interstate Com-

merce. Act of even-handed regulation of competing

modes of transportation. That issue is whether the

Commission under Section 5 of the Act may be per-

mitted to deny protective conditions to motor carrier

employees under circumstances that would not have

warranted dénid] of ghe same measure of protection to

_ vailroad loy@e#'similarly situated: If the order

- of the Commission and of the Court below, to the effect

that the Commission is not required to impose the same

measure of protection to ‘both ‘classes of employees,

is correct, then a serious and substantial constitutional

question is presented respecting the interpretation and

application of Section 5 of the Act.. Section 5, as

already construed by the Commission, requires ‘fair

and equitable’”’ treatment of both classes of employees.

If. what. is “fair and equitable’~ for bus drivers

is something other than, and substantially less than,

. f

15

what is ‘‘fair and equitable” for locomotive engineers,

then Section 5 is unconstitutional. For, as will ‘be

shown, that distinction cannot be ia sg ih any

reasonable statutory purpose.‘

This is the first occasion for the issue of protec-

tive conditions for motor carriér employees to be be-

fore this Court. However, there is nothing episodic in

the effort by the Amalgamated to gain fair, reason-

_ able and adequate protection for the American bus

drivers.

—_

Amalgamated is the predominant union jn the pas-

senger transit industry. It represents more than a

hundred thousand bus drivers.and other employees in

both locdl and inter-city transit in all parts of the”

' United States. For example, the employees of the

Greyhound Bus System, and many of the employees of

_ the Transcontinental Bus System, the system with

which American is affiliated as a wholly-owned sub-

sidiary, are represented by Amalgamated. For many

years this union has seen the members of its locals

adversely affected as operating rights have been traded

back and forth among motor carriers. Since 1940,

* The doubt surrounding this issue is compounded by the conflict-

ing positions taken on this question in the two appeals by counsel

for the Commission. On the first appeal, counsel for the Commis-

sion conceded that the Commission does not have the discretion to

deny protection to motor carrier employees under circumstances

in which the Commission would not have derfted protection in a

railroad case. Counsel argued that protection Pe gi to

the American drivers not because they were motor employ-

ees, but because of considerations which would have warranted

denial of protection to railroad employees also. In the second

appeal, cortnsel adopted a quite different position and stated on

brief to the court below that ‘‘What is fair and equitable for

railroad employees... . provides no standard for the minimum

fair and equitable protection the Commission must grant to motor

carrier employees.’’

16

Amalgamated has attempted to obtain from the Com-

mission conditions attached to its orders, so that the

employees could share in the benefits derived by the

carriers from the transfers of operating rights, and so

that these employees would not be adversely affected.

Year after year the Commission has denied the relief

requested.® ©

For railroad Pie SA ais situation has been quite

different. Since the 1930’s, since even before the Act

was amended in 1940 to specifically set forth in Section

5(2)(f) the protection deemed fair and equitable for

railroad employees, see Chicago, Rock Island & Gulf

Railway Co. Trustees Lease, 230 1.C.C. 181 (1938),

aff’d sub nom. United States v. Lowden, 308 U.S. 225

‘ (1939), railroad employees have been accorded com-

prehensive income protection and other protective con-

ditions in Section 5 cases.° These railroad conditions ©

* were used as a pattern for Amalgamated’s request to

5 The usual practice of the Commission in these motor carrier

cases is to impose 4 ‘‘reservation of jurisdiction’’ only. See-e.g.,

The Greyhound Coerp.—tControl—Southeastern Greyhound, 57

M.C.C. 123, 156 (1950). In The Short Line, Inc.—Purchase—New

England Transportation Co., 75 M.C.C. 33 (1958), and Baggett

- Transportation Co.—Purchase—Hunt Freight Lines, Inc., 75 ~

M.C.C. 147 (1958), the Commission granted a three-month sever-

ance allowance. In 1963, the Commission added. to this severance

allowance a three-month ‘‘displacement’’ or income protection

allowance. .Indiana Motor Bus Co.—Purchase—Chicago, South

Shore R.R.,.— M.C.C. —, Docket No. MC-F-8122 (1963), But,

in neither the instant case, nor in the companion case, Overnite

Transportation Co.—Purchase—Rutherford Freight Lines, Inc.,

97 M.C.C. 568 (1964), did the Oomanietton grant a “displacement”

allowance. .

*The Commission has cited to this Court a near-hundred rail-

road cases in which comprehensive protective conditions have been

imposed in Section 5 proceedings. See Appendix to the Brief of

thé United States and the Interstate Commerce Commission in

Brotherhood of Maintenance of Way Employes v. United States,

366. U.S. 169 (1961).

17

the Commission, and it was these eonditions which

the Commission refused to impose in this case.

The capriciousness of the Commission’s interpre-

tation of Section 5, to deny to motor carrier employees

the same measure of relief afforded railroad em-

ployees, is highlighted by a single Commission prac-

tice.. In the.United States, there are many bus drivers

who are, because of the corporate structure of their

employer, technically employed by railroad companiés.

‘Yet, these drivers are not otherwise engaged in rail-

way labor; they drive buses for a living, or they work

as bus mechanics. They are, as far as their job de- ©

scription is concerned, precisely like those drivers be-

fore this Court in this case. Notwithstanding these

facts, and notwithstanding the identity of their em-

ployment and job function, the Commission treats these ©

bus drivers as railroad employees and grants them

railroad protective conditions. Amalgamated agrees

these employees are entitled to this ‘‘fair and equi-

table’’ treatment. Obviously, they should not be treated

differently simply because they drive a bus, rather

than a locomotive, for a living. But, an important and

substantial question of the application of Section 5, -

and of the continued administration of that Sectiori

by the Commission, is presented, when other bus«

. drivers, no y differently situated, are arbitrarily. denied

protection because they are motor carrier employees.

1. The Statutory Requirement of @ Parity of Treat-

ment. There can be little question that the Commis-

sion’s denial of protective conditions to motor carrier

employees deviates from the Congressional purpose.

As originally enacted, the Interstate Commerce Act

applied only to the railroad industry. In 1935, the

Motor.Carrier Act, 49 Stat. 543, was passed, and it be-

came Part II of the Interstate Commerce Act in

-2

—._3

1940. See 54 Stat. 919. The Motor Carrier Act

brought the motor bus and trucking industries under

the control and regulation of the Commission. Sections.

212 and 213 of the Motor Carrier Act, 49 Stat. 555,

conferred upon the Commission the same basic con-

trol over the transfers of motor carrier operating rights

as existed under Section 5 for. the railroads, —

The legislative history of the Motor Carrier Act

reflects clearly the Congressional intent of even-handed .

regulation of both forms of transportation.~- The Fed- .

eral Coordinator of Transportation cited, as one of the

primary reasons for the new legislation, the oversupply

of unregulated transportation facilities in competition

with the well-regulated railroad industry. His pro-

posal was to bolster the competitive position of the

railroads, whose financial position was of national con-

eern, by regulation of the motor carrier industry on

‘terms equal to the regulation of the railroads.’ But,

this was not to be accomplished at the expense of the ©

employee interests: ‘‘fair treatment of labor’’ was to

be recognized and promoted.” Unquestionably, this

7 Hearings on S. 1629 Before the Senate Committee -6n Inter-

state Commerce, 74th Cong., Ist Sess. 50 (1934). In 1928 and

1932 the Interstate Commerce Commission had made exhaustive

studies of the motor carrier industry, the effect of its competition

on the railroads, and the need for federal regulation. See Motor

Bus and Motor Truck Operation, 140 1.C.C. 685 (1928) ; Coordina-

tion of Motor Transportation, 182 1.C.C. 263, 379 (1982). See.

also Magnuson, ‘‘The Motor Carrier Act of 1935: A Legislator

Looks At The Law,’’ 31 Geo. Wash. L. Rev. 37, 40-41 (1962).

® Hearings on S. 1629 Before The Senate Committee on Inter-

state Commerce, 74th Cong., Ist Sess. 51 (1934). See also Eastman,

Report of the Federal Coordinator of Transportation, 1934, H. R.

_ Doe. No. 89, 74th Cong., 1st Sess. 8 (1935). This Report, and the

statement of objective set forth therein, is also referred to in the

Senate report accompanying favorable action on the Eastman bill,

S. Rep. No. 482, 74th Cong. 1st Sess. 3 (1935).

Pe re ee nn

,

19

conclusion was based in part upon the Commission’s

own findings that unrestrained and unregulated motor

carrier competition had the ‘‘tendency to break down

wages and conditions of employment.’” Representa-

tives of labor likewise testified on the need.for stabi-

lized working conditions in the motor carrier industry,

and in favor of a parity of treatment for both indus-

tries, so as to avoid continuation of the unfair com-

petitive advantage held by the motor carriers.”

Through the years the Commission has, at best, paid

scant attention to this legislative history. .On the ene

hand, the Commission has stated, ‘‘the Act, taken as a

whole, makes clear the congressional intent that public -

»xolicy demands fair and equitable treatment of em-

ployees of motor carriers.”” Short Line, Inc.—Pur-

chase—New England Transp. Co.,,77 M.C.C. 33, 37

(1958). And, in the first order in the instant case,

the Commission held that its refusal to act ‘(should

not be construed as opposing in all instances’’ the im-

position of railroad conditions for the protection of

_ motor earrier employees. 90 M.C.C. at 188." How-.

ever, on the other hand, as the Commission itself con-

. eedes, ‘In no instance ... has the Commission dm- -

posed such conditions where only motor carrier em-

ployees were involved,’’ Tbid., and the Commission

will not impose such conditions ‘unless compelling _

reasons so dictate.’? 97 M.C.C. at 440. This is, it is °

® Coordination of Motor Transportation, 182 I.C.C. at 383.

10 Hearings on S. 1629 Before the Senate Committee on Inter-

’ state Commerce, 74th Cong., Ist Sess. 417, 423, 476, 542 (1934).

11 Eleven years earlier, in Hudson Bus Lines—Control—Boston

& Maine Transportation ‘Co., 58 M.C.C..133, 135 (1951), the Com-

mission stated that the parties to a motor carrier case should use

the railroad conditions ‘‘as their guide” in reaching an agreement

on efnployee protection.

mo ee yr ee

20

respectfully suggested, something other than an even-

ar on interpretation and application of Sectien 5,

og and is wholly capgicious and contrary to the statutory

} ‘ rpose. The correctness of this interpretation de-

serves this Court’s- attention, for. maintenance of the

competitive relationship between the competing modes

-_ of transportation turns i in large part on this. provision.

2. The Constitutionality of Section 5. If this Court

finds no error in the Commission’s interpretation and

application of Section 5, which results in different ”

- ,standards of protection for motor carrier and rail- ©

-road employees, a substantial constitutional question is

-presented involving the contravention of the Due Proc-

ess Clause of the Fifth Amendment of the Constitution

of the United States.

The Commission has historically justified its de-

nial of protective conditions to motor carrier em-

ployees on the ground that protection for railroad em-

ployees is ‘‘mandatory”” under Section 5(2) (f), where-

as for motor carrier employees under Section 5(2) ( c)

conditions are merely COATT.

The answer to this is two-fold. First, as the Com- |

mission held in Short Line, supra, p. 19, motor carrier

_ employees are entitled to ‘‘fair and equitable’’ treat-

ment also, just as railroad employees are entitled. Fur-

thermore, nothing appears in Section 5, ar anywhere

else in the Act, to support the proposition that what is

‘‘fair and equitable’? for motor carrier employees is

yrotection substantially less than that afforded rail-

road employees as “fair and equitable.’’ |

Second, it would appear that the “mandatory”’-

‘‘diseretionary’’ dichotomy. which the Commission

now reads into the Act is actually a post hoc rationali-

| 21

zation formulated to obscure the discrimination prac-

ticed by the Commission scans motor carrier

employees.’™

Under former Section 5(4) (b) of the Act, 48 Stat.

217, the Commission was given general authorization

only to impose conditions which would ‘‘promote the

public interest.’’ Acting on this general authorization

alone, the Commission granted, with the approval of

the Supreme Court, see United States v. Lowden, 308...

U.S. 225 (1939), protective conditions which do not

differ substantially from those which Amalgamated

now seeks. This general authorization remains in the

Act in Section 5(2)(b): The only difference is that

today the Act spells out in Sections 5(2)(c) and (f) ~

that the ‘‘interest of the carrier employees affected’’

is to be given specific weight, and that ‘‘fair and

equitable’’ conditions are to be afforded.

If the Commission was impelled in Lowden to pro-

vide full protection for railroad employees at a time

. when the only statutory authority was a general one,

it is hard to accept the Commission’s present rationale

whieh completely ignores the same general authoriza-

tion in 5(2)(b), and rests exclusively on the specificity

of 5(2)(f). The Commission has never explained,

and certainly the court below did not, why the substan- |

tial protective conditions imposed in Lowden to pro-

mote the public interest in 1938, are not appropriate

in 1966 to promote the same public interest, under the

‘same showing of adverse effects.

118 The -claim that conditions, beyond the statutory minimum,

are ‘‘mandatory’’ under Section 5(2)(f) is not accurate. What

is ‘‘fair and equitable’’ for railroad employees is not flied.’ The

history of railroad conditions has been one of continual expansion

on a case-by-case basis. Cf. Seaboard Air Tine R.R.—Merger—

Atlantic Coast Line R.R., 320 1.C.C. 122, 200-205 (1963).

22

This Court has held that the Due Process Clause

embodies the standards requisite to constitutional legis-

lative action, and the prohibitions against invidious

classification and discrimination, found in the Equal *

Protection Clause of the Fourteenth Amendment.

' Schneider v. Rusk, 377 U.S. 163, 168 (1964) ; Bolling

v. Sharpe, 347 U.S. 497, 499 (1954) ; Umited States v..

Petrillo, 332 U.S. 1 (1947). In order to hold that Sec-

tion 5 of the Interstate ‘Commerce Act does not fall.

‘afoul of this equal protection standard, it must be de-

termined_that the distinction, which the Commission

groups of employees, is somehow related to the pur

has held exists between the relief to be accorded the _

poses served by the statute. Otherwise, Section 5 fal

within’ the ambit of prohibited legislative action be-

' eause the provision effects invidious discrimination

against motor carrier employees as a class.

In the preamble to the Transportation Act of 1940,

Congress declared the National Transportation Policy

to include the’ encouragement of “‘fair wages and

equitable working conditions.’’ 54 Stat. 899. In Sec-

tion 5(2) (b) of the Act, Congress authorized the Com-

mission to impose “terms and conditions’’ which are

deemed ‘‘just and reasonable,’’ so as to mitigate the

- adverse effects upon employees of Section 5 trans-

actions. ;

This Court has aie examined the ways in which

employee protection promotes the National Transpor-.

tation Policy by encouraging adequate and efficient

trapsportation service, and how employee protection

helps develop, coordinate and preserve the national

transportation system. See United States v. Lowden,

308. U.S. 225 (1939). To paraphrase the Court’s de-

cision is that case, unless the hardships caused to em-

ployees by Section 5 proceedings are mitigated, and

. a

A PO e 2 OU Be nde 8A ew

a

unless employees are afforded treatment which will

assure high morale and which will reduce the possibil-

ity of an interruption to servicé by labor disputes, the

‘Congressional scheme will necessarily falter.

The injuries sustained by the bus drivers in this

case have been noted. Their losses in earnings, re-~

duced wages,.additional moving and living costs, do

not differ from those suffered by railroad employees:

in a Section 5 proceeding. The Commission has acted

to mitigate the damages of railroad employees. It

has not done so for motor carrier employees. Section

5, as applied by the Commission, thus condones the

placing of burdens on motor carrier. employées which,

have been lifted from railroad employees. Nothing in |

the National Transportation Policy justifies this un-.

equal protection of the law. The classification of motor. -

carrier employees is discriminatory, This discrimina-

tion is invidious, it has no reasonable statutory basis

or purpose, and it is therefore unconstitutional. .

_. 3. There is also presented in this case the substantial ;

_question of the proper standards by which Commissiorr

decisions, and appellate review of those decisions, are

to be adjudged. For the fact is if the customary ‘‘sub-

stantial evidence of record”’ standards are used.to test

the validity of the Commission ordd and the court’s

affirmance of. this order, the judgment of the court

below must be reversed.

One of the general grounds relied upon, first by the .

Commission and then by the Court, to distinguish the

protection required by motor carrier. employees was

“the expanding nature of the motor carrier industry,

and the high degree of transferability of motor carrier

employees within the industry.” 97 M.C.C. at 440.

; : hen :

24

However, this Court may search in vain the record be-

fore the Commission for-evidence probative on these

critical findings. “The carriers offered no evidence that

the motor carrier industry is an expanding one, rather

than a contracting one. And*there was no evidence

| proffered to show that the American drivers possessed

skills which were more transferable than those of

railroad workers. Furthermore, the Commission’ s de-

- eision is barren of the requisite articulation of the rele-

vance of these findings to.the issue presented of whether

tlte- employees were entitled to protection for losses

which even the Commission concedes they suffered.

* Be as if the Commission took ‘administrative no-

tice’’ of certain facts, and used these facts to determine

the cause against Amalgamated. Amalgamated had no

opportunity to meet, answer or rebut the claim that

the motor carrier industry i is an expanding one, or that

the skills of bus drivers are easily transferable to other

. employment. Obviously, there are limits to what an

agency may do in the name of administrative notice.

. [T]o’press the doctrine , . . and to do that retro-

actively” after the case had been submitted, would be to

turn the doctrine into a pretext for dispensing with a

trial.’”? Ohio Bell Telephone v. PUC, 301 U.S. 292, 302

(1937). These limits have been exceeded here, and. the

denial of due process to Amalgamated could not be more

clear.

~ The denial of due process to ketihieiiatin is also

present i in the court’s reiteration of the same Commis-

sion findings. ‘The court compounds the error by fur-

ther stating that the needs of railroad employees are

greater than those of motor carrier employees because

‘‘Displaced railroad employees~meet with more diffi-

culties in obtaining similar positions... .’’ Not even .

—

Le egee Ty are Ue SOTO EET ant DP SN ORES, eer CED

25

Or. F%. e

the Oobeitianliais went so far, and the court’s conclusioii

appears to be of whole cloth.” Son

\

\

The court’s treatment of the anil ormula of em.

ployee’ protection awarded by the Co ion to am

. American drivers, and of Amalgamated’: rabjecti

thereto, is peculiar. All that the court states a retet :

ence to the American drivers specifically i is:

‘“‘The only financial loss to employees ‘that the

\Commission could here attribute to the Midwest

Buslines (sic) occurred with its employees who

were required to change their place of residence

.... The majority of the Commission has pes. ie nteit

, only such protection as the employees wouldrhave

been entitled to had they followed their work, and.

such protection seems fair and equitable to em-

ployees of American Buslines.’ ™%8 253. F. Supp at

‘484.

12 The court’s opinion i in this respect was undoubtedly based, in

part at least, on certain representations made by the Government

in its brief to the court which found no support in the record. The

Government devoted considerable space in its brief to an examina-

tion of recent special consideration given railroad employees in

other forums and by. other bodies. Apparently, this was intended

_ to justify the Commission’s finequal treatment of motor carrier

employees, even though the Commission itself had never alluded to ©

this consideration as d&erminative. Amalgamated objected to this

extra-record, post hoc rationalization by the Government, see

Burlington Truck Lines v. United States, 371 U.S. 156, 168 ( ),

but the.court below nevertheless accepted: these rep resenfa ions

fact ‘and relied upon them,

18 The court has apparently confused. the carriers involved and

the employer of the drivers adversely affected. The employees so

affected were American drivers, not Midwest employees. Amalga-

mated was appearing on behalf of the American ‘drivers who lost

their jobs and who were compelled to take other-assignments on

American in order to remain employed. . No ‘‘Midwest’’ drivers

‘were required to change their place of residence.

. ~——

26

This holding is vague, confusing amd not responsive

- to what the Commission actually decided in its ‘latest

order. In the first place, the court had already held,

on the previous appgal, that the American drivers were

not required to ‘‘ follow their work,’’ by accepting offers

of employment with Midwest and Continental, which

had purchased the routes, because those offers did not

include recognition of full seniority rights. 221 F. |

Supp. at 961. Secondly, as shown above, many Ameri-

can drivers did exercise their choice, when the oppor-

tunity presented -itself, did bid assignments in other

locales, did move their households and families, and did

suffer losses, including reduced earnings, for which the —

Commission’s protective conditions do not compensate.

What the Court actually meant by this conclusion is

not clear. + a

What the Commission did on the specific formula of

employee protection was to treat separately three dif-

ferent issues. On none of these is the Commission’s

decision, supported by the ‘‘substantial evidence’”’ of

record required for legitimate a istrative action.

See,Burlington Truck Lines v. United States, 371 U.S.

156, 968 (1962); and Interstate Commerce Commision ion

v. Z: Transport Co., 368 U.S. 81, 93°(1961). ~

(a) Displaced Drivers~Who Stiffered Losses In

Earnings. The ways in which the. Ameriéan drivers,

who lost their jobs by the sale of the:routes, sustained

losses in earnings, and the evideride of these losses, has

already been detailed, supra, pp. 6-9. The Commis-

sioyein its first order, denied protection to these em-

ployees opthe basis of a finding that they failed to take

advantage of better paying jobs elsewhere on American,

and therefore the injuries sustained_were a matter of

7 a

their own free ‘‘choice.” 90 M.C.C. at 187. On appeal

from this first order, the court held that all ‘‘the

grounds”’ relied upon by the Commission ‘‘ were accord-

ingly erroneous,” and reversed and remanded. 221 F:

Supp. at 961. On remand, the Commission repeated,

as the reason for denying protection to these displaced

drivers, the same ground litigated adversely to it: ‘‘the

lesser wages ... resulted from their own choice not to

uccept employment paying more than they were then

earning.’’ 97 M.C.C. at 439. Patently, the court below

erred in failing to apply the principles of res judicata

on this issie, and by letting stand in favor of the Com-

mission a ground which had been litigated adversely to

it previously.

The displaced drivers had no ‘‘choice’’ in this matter.

Those who had been employed in’ the. “‘southern’’

seniority district had nowhere else to bid and’ were ~

compelled to accept assignments in the ‘‘eastern”’ dis-

trict where many were unable-to earn as much as they

had averaged before the sale. ‘‘Central’’ seniority dis-

trict drivers, who still had bidding rights, did not

‘“‘choose,’’ in the voluptary sense implied by the Com-

mission, to ‘‘ride-out bids and not move to the carrier’s

eastern district,’’ as the Commission states, 97 M.C.C.

at 433. They were in fact required by contract to re-

main in their home seniority district unless and until

furloughed in that district, and then and only then were

they permitted bidding rights into the ‘‘eastern”’ dis-

trict. As shown above, even when this happened and

they secured these new bidding rights,.they were still

vnable, ‘for many months, to earn as much as they had

averaged before. The conclusions of the Commission to

the contrary are not enly not supported by substantial

cvidence, they are indeed contrary to the record.

28

(b) “Bumped” Drivers. The Commission refused

tu grant any conditions for the protection of the drivers

who, because . of their lower seniority ranking, were

‘“bumped’’ by the 22 other drivers who lost their jobs

because of the sale. 97 M.C.C. at 441 n. 6. Under

the circumstances of this case, this eet is par-

ticularly unfortunate.

At the hearings before is Conmalesion, Amalga- |

mated attempted to introduce into evidence specific

illustrative examples. of employees who had been

bumped into lesser paying or otherwise less desirable

jobs. But, on objection from the carriers, Amalga-

mated was refused the oppo ity to do so by the

Hearing Examiner, and Amalgamated was limited to

an offer of proof on this point. It is grossly unfair

now for the Commission to hold the adverse effects

seem impossible to ascertain, minor in extent ‘and diffi-

cult to attribute to the transaction. This was the Com-

mission’s doing, not Amalgamated’s, and the court be- -

low erred in failing to rectify the matter.

Before the court below, the Commission conceded

that ‘‘there may have been biffapings.”’ But, the Gov-

_ ernment went on to.contend that the record did not

show these bumpings were ‘‘unavoidable,’’ or that they

‘resulted directly from the transaction.’’ Again, the

record is otherwise, and does not support the Commis-

sion’s contention. Both drivers who testified at. the

hearing, one from the ‘‘southern’’ district and the

other from the ‘‘central,”’ testified they had bumped

other less senior drivers when they took jobs in the

‘‘eastern’’ district. One even testified that he had him-

self been bumped by a more senior driver after the

“na

29

\

sale and that this was one of the reasons why his earn-

ings were lower.“ :

(ec) ““Iump-Sum” Settlement Allowance. The Com-

mission, in imposing a limited form of protection as

a “lump-sum” settlement allowance, departed from its

customary practice in railroad cases and, without any

reasoned explanation whatever, refused to grant con-

ditions protective against the losses sustained in the

forced sale of real estate and forced cancellation ‘of |

leases. The Commission, again differently from its

practice in railroad cases, also arbitrarily restricted

_the protection accorded by — the provision to a —

one-year period.

-The Commission cites no basis in the record for |

these restrictions. There is no support anywhere in

the record that excess rents and utility costs experi-

enced by the displaced drivers abruptly ceased at the

end of one year. ~ Railroad employees ‘receive protec-

tion in this regard-for a full four years and the Com-

mission, absent some reasoned explanation, should have

"The treatment by the Commission of bumped drivers also

illustrates the discrimination practiced by the Commission against

motor carrier employees, as compared with railroad employees.

In a recent railroad proceeding, the carrier questioned whether

bumped’ employees were within the scope of the protective condi-

tions granted railroad workers. The Commission’s response was

explicit :

‘It is ‘definitely. our intention that the protection afforded by

the conditions shall be available to all employees dismissed or

displaced as a: result of a chain reaction resulting from the

exercise of seniority rights by an employee whose job is

' .abolished or whose work is transferred . . . Such ‘secondary?.

results are within the scope of the conditiohs. ”” Southern

Railway Co.—Control—Central of Georgia By, 317 I.C.C.

729, 730-731 (1963).

4

30

extended the same measure of relief to the motor car-

rier employees affected herein.

The Commission virtually conceded error in the court

below by admitting that the Commission would have

granted: this additional protection to railroad em-

ployees. But, the Commission argued, because in cer-

tain other regards the drivers received more protection

against certain other unrelated miscellaneous costs than

_ railroad employees receive, the drivers cannot be heard

'- to complain. Clearly, however, the equal protection of

the law cannot be negated so facilely. Each injury

must be weighed, and each item of protection examined,

to determine whether the Commission has supplied the

reasoned explanation required by law in granting or

denying protection. Only after this has been done.

may it be said that the protection ordinarily given °

railroad employees has been properly denied to th

American drivers.” _ .

* One other ground was cited by the Commission in support of

its denial of full protective conditions. The Commission, relying

on data through the year 1958, attempted to portray a weakened .

financial status of American. The reasons why the Commission

limited its view to that period are unknown. The annual reports

of the carrier to the Commission from 1960-1964 reflect a quite

different picture. In 1960 American had net income of $667,000,

and an earned surplus of $650,000. By .1964, the earned surplus

had increased to $1,500,000, on a net income of $500,000. The

Commission can hardly contend that American lacks the where-

withal to pay employee protection. And no argument has yet

been made why the employees should not share in the financial

successes experienced by American since 1958.

-

31

CONCLUSION

For- the reasons stated, the questions presented in

this case are substantial, they are deserving of this

Court’s review, and jurisdiction should be noted.

Respectfully submitted,

I. J. GROMFINE

HERMAN STERNSTEIN

Wiu1M B. PEER

1155 15th Street, N. W.

Washington, D. C. 20005

Attorneys for Appellant

ZIMRING, GROMFINE and STERNSTEIN

1155 15th Street, N. W.

‘Washington, D. C. 20005

Of Counsel

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APPENDIX A _ ac ™

(Filed April 20, 1966) |

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Civil Action No. 644-65 ° -

American Busines, Inc., Plaintiff,

Unrrep Srares or America and Interstate ComMERCE

a. Commission, Defendants...

.

cent AC EO ye tol RSD

Civil Action No. 68465.

Ama.caMatep Transit Union, AFL-CIO, Plaintiff,

Lf

Unirep Srares or AMERICA and INTERSTATE COMMERCE

Commissio®, Defendants. ie

AMERICAN BusLINEs, Inc., NaTIONAL ASSOCIATION OTOR

Bus Owners, Intervening Defendants. e

wo

Civil Action No. 894-65 ;

INTERNATIONAL BRorHERHOOD OF TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS oF America and LocaL ~

Union 549, Plaintiff's, si

Vv.

a

Unitep States oF AMERICA and INTERSTATE COMMERCE

ComMIssION, Defendants. oF

Ceti TRANSPORTATION CoMPANY and Speman

Freight Lives, Inc., Intervening Defendants. -.

Opinion

James EK. Wilson, Warren Woods, and Jon F. Hollen-

green, of Washington, D. C., for the Plaintiff in C.A. 644-65

and for Intervening ‘Defendant, American Buslines, Inc.,

in C. A. 684-65. ; 3

” al :

2a

I. J. Gromfine and William B. Peer, of Washingtes, D. C.,

for the Plaintiff in C.A. 684-65. .

Herbert S. Thatcher and David , Barr, of eases see :

dD. C. for the Plaintiffs in C.A. 894-65.

William H. Orrick, Jr., Assistant Attorney Quantal of

the United Stites, and John H. D. Wiger, Department of

Justice; David G. Bress, United States Attorney; Robert

W. Cienana, General Counsel, and Leonard S. Goodman,

Assistant General Counsel, Interstate Commerce Commis- |

sion; of. Washington, D. C., for Defendants.

Robert J. Corber, of Washington, D. C., for Intervening

Defendant, Natiqnal Association of Motor Bus Owners,

in C.A. 684-65.

J. W. Alexander, Jr., of Charlotte, North Carolina, and

W. T. Croft, of Washington, D. C., for Intervening Defend-

ants Overnite Transportation Company and ewe

Freight Lines, Inc., in C,A. 894-65. .

«t

| Before Burcer, United States Circuit Judge, and Mc-

Gume and Curran, United States District Judges.

- Curran, J.: Two of these consolidated civil actions in-

volve attacks by two labor unions upon orders of the Inter-

state Commerce Commission in Midwest Buslines, inc.—

Purchase. (Portion)—American Buslines, Inc., 97 M.C.C.

426, and-in Overnite Transportation Co —Purchase-SRuth-

_ erford Freight Limes, Inc., 97 M.C.C. 568, on the grounds

that the Commission gave too little financial protection to

adversely affected employees. in certain financial transac- —

tions between motor carriers. The third action, filed by

American Buslines, Inc., seeks to set aside the order en-

tered in the Midwest case for the alleged reason that the

Commission gave too much protection to the affected em-

ployees. These three actions are filed pursuant to 28

T.S.C. §§ 1336, 1398, 2284, and 2321-2325.

3a

&

This is the second time that the Midwest case is before

the Court, as néither the union nor the buslines company

was satisfied with. the order of the Commission on the

remand. The Overnite:case was filed by the Teamsters

Union and is an attempt to. reargue the legal issues pre-

sented in ‘the first appeal of the Amalgamated case. In-

that case, the Corhmission approved the purchase of two

of the American Buslines routes by Midwest Buslines and

reserved jurisdiction for three years to entertain any ém-

ployee petitions regarding needed financial protection from

a possible adverse effect of the transaction. The purchase

was completed December 31, 1959. On September 20, 1960,

the Commission granted Amalgamated’s petition to reopen

the proceeding, allowing it to show ‘‘specifically how, and

to what. extent, particular employees of the carners, con-

cerned have been adversely affected’’.. The Commission

declined fo impose any conditions on behalf of the em-

ployees in the reopened proceeding.

This Court set aside the order of the Commission, stating

it ‘‘need not attempt to delineate what measure of relief,

if any, should be provided to the employees of American

’ Buslines, Inc.’’ and ‘‘that if any particular measure of

relief is one which would ordinarily be granted to railroad

workers similarly situated the Commission should not

deny it to the employees of American Buslines, Inc., with-

ont a reasoned explanation’ of its denial, consistent: with -

what has here been said’’. On the remand of the Amalga-

mated case, the Commission reopened its proceedings but

stated that it was | ‘‘for consideration on the record as

made’’,

In August, 1964, the Canaan laa its nen on

reconsideration. It conditioned its order upon payment by

American of a ‘“‘lump sum settlement’? to certain of the

employees to cover ‘‘loss of pay while moving, temporary

maintenance of two househotds, and the excess of rents and

utilities costs paid for a period of one year after the date