# Petition for Writ of Certiorari — Deford v. Soo Line Railroad > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_1335%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1989 - **Citation:** 492 U.S. 927 ## Text ne 88 - l 8 9 4 paras eg may 10 1388 No. ey a ePAHOL, JR. ~-OLERK IN THE bios Supreme Court of the United States OCTOBER TERM, 1988 ROBERT F. DEFORD, RAILWAY LABOR EXECUTIVES’ ASSOCIATION and UNITED TRANSPORTATION UNION, Petitioners, Vv. Soo LINE RAILROAD COMPANY, et al., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT WILIAM G. MAHONEY JOHN O’B. CLARKE, JR.* RICHARD S. EDELMAN HIGHSAW & MAHONEY, P.C. Suite 210 1050 17th Street, N.W. Washington, D.C. 20036 (202) 296-8500 TIMOTHY D. KELLY 3720 IDS Center 80 South Eighth Street Minneapolis, MN 55402 (612) 349-6171 Attorneys for Petitioners Date: May 10, 1989 * Counsel of Record WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 = ® ons Cxee aey 60 wen — ae — es _- _ SE oo - _ ~= ee — an _ = - - eee QUESTION PRESENTED Does the complete pre-emption doctrine encompass fed- eral statutes, such as the Railway Labor Act, 45 U.S.C. $ 151, et seg., and the Interstate Commerce Act, 49 U.S.C. £10101, et seg., where Congress has not provided alterna- tive federal causes of action for a litigant whose inde- pendent state law rights are asserted to be pre-empted by such statutes? . (i) fan =r, PY ate y i 7 ine . a i _ - - a e \ a si ; vw a¥ si 7 TABLE OF CONTENTS gs, gy | gs EE nena ncnnsemeccnnnne Ls) eg 0) a Neen ecco. enc cvccanssasensnecnen-eonee--aeoee- ee arr! OUrt WecisiON ................................ D. The Court of Appeals Decision .............00000000...... DO EENEPEIONS ............................---- ee I. THE PANEL DECISION IS INCONSISTENT II. WITH THE LIMITED SCOPE OF THE COM- PLETE PRE-EMPTION DOCTRINE AND WITH THIS COURT’S REASONING IN COM- PLETE PRE-EMPTION CASES ........................ Ee Ee THE DECISION OF THE DIVIDED EIGHTH CIRCUIT PANEL CONFLICTS WITH A THIRD CIRCUIT DECISION IN A VIRTU- ALLY IDENTICAL MATTER AND WITH THE DECISIONS OF OTHER COURTS ........ (iii) ) oo”nrirnnww wo WW — Oo 11 15 17 19 iv TABLE OF CONTENTS—Continued Page III. EXPANSION OF THE COMPLETE PRE- EMPTION DOCTRINE, AND THE RELATED CONTRACTION OF SUBSTANTIVE STATE LAW, IS A MATTER OF NATIONAL IMPOR- PRUs TREES SAWOPCORMEEE fo clecccics sce veeptpcmeesees 21 CDT N EIEN oiscccnissicnceseteie sobs tisik aumgehecssmannnannaNaeleia sean 23 Vv TABLE OF AUTHORITIES Cases Relied Upon: Page Avco Corp. v. Aero Lodge No. 735, IAM, 390 U.S SE GN cos cece catecia pace 13, 14, 15, 16 Babcock v. Tam, 156 F.2d 116 (9th Cir. 1946) 16 Baker v. Geist, 457 Pa. 73, 321 A.2d 635 (1974) 16 Baltimore & Ohio R.R. v. Oberly, 837 F.2d 108 (3rd Cir. 1988) .........: 22 BBCA, Inc. v. United States, 630 F. Supp. 349 (D. Minn. 1986) 16 Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) passin Chicago and North Western Transportation Co. v Kalo Brick & Tile Co., 450 sng 311 (1981) 17-18 Cresenzi Bird Importers, Inc. v. New York, 658 F. Supp. 1441 (S.D.N.Y. 1987) OPER eee 22 Ex Parte No. 392 (Sub-No. , Class Exe smoti on for the gh pons and eee on of Rail Lines under 49 U.S.C. 10901, 1 I.C.C. 2d 810 (1925), aff'd sub nom. Illinois Commerce Commission v. Interstate Commerce Commission, 817 F.2d 145 Pa ee OE AONE oro ec rscane 5 Franchise Tax Board v. Laborers Vacation Trust, 463 U.S. 123 (1983) . AO OSE re Se 13, 21 Gendron v. Chicago and Northwestern Tronepor- tation Co., et al., N.D. Ill. No. 88 C 918, decided Fe Ae, gti Dales 0 Oa Tea tiek Stee aaa ieee 21 Hayfield Northern Railroad Co., Inc. v. Chicago & North Western Transportation Co., 467 U.S. AE Siete eatcls ert Ai Rd Sb eee even eed 18 In re Chicago, Milwaukee, St. Paul & Pacific Rail- road, 799 F.2d 317 (7th Cir. 1986), cert. denied, ite SG eR | 5 ERRNO ahora 4 Interstate Commerce Commission v. Brotherhood of Locomotive Engineers, 482 U.S. 270 (1987).. 18 Lingle v. Norge Div. Magic Chef. Inc., 486 U.S. » We de Bee SEO CIOES) ... 9, 16,17 Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58 TRS NEAL A pt Rapa nee -cahey eine le SRE LEA AAR IEE passim Neubauca v. Clontier, 265 Minn. 539, 122 N.W.2d EE Sg EAS Lt clear aie eae ret At SOAR SRE RARE 16 Order of Railway Conductors v. Pitney, 326 U.S. Bh I eee Alb EE BS OPE 5 Re SL DSO 15 vi TABLE OF AUTHORITIES—Continued Page Price v. PSA, Inc., 829 F.2d 871 (9th Cir. 1987), cert. denied, 108 S. Ct. 1732 (1988) .................. 21 Railway Labor Executives’ Association v. Pitts- burgh & Lake Erie Railroad Co., et al., 858 F.2d 936 (Srd Cir. 1908) «ccc aa eee passim Searboard Air Line Railroad v. Daniel, 339 U.S. 118 (GL) § Rene Ee eh Math Beste 18 Slocum v. Delaware, Lackawanna & Western R.R., $39 U.S. 239 (1960) 3c eae 15 Textile Workers v. Lincoln Mills, 303 U.S. 448 (1957) —. 2... concsinencvcsouunenale een ees 4,16 United States v. Gleneagles Inv. Ce., Inc., 565 F. Supp. 556 (MLD. Pa. 30000... 22 United States v. Tabor Realty Corp., 803 F.2d 1288 (3rd Cir. 1986), cert. denied, sub nom. McClellan Realty Co. v. United States, 107 S. Ct. 3229 (1967) .........1..casscssssseepeg eee 22 STATUTES AND OTHER MATERIALS: Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. Section 502(a) (1) (B), 29 U.S.C. § 1132 (a) (1) CB) pee 2,14 Section 502(f), 29 U.S.C. § 1132(f) Cee ee 2, 9, 14 Interstate Commerce Act, 49 U.S.C. § 10101, et BOQ. <..ccecaccsonsedesnvananedueeniieeel eee ee A 2 Section 10505, 49 U.S.C. § 105065 ........................ 5, 19 Section 10901, 49 U.S.C. § 10901 ....................... 4,19 Section 11341 (a), 49 U.S.C. § 11341 (a) ........... ; 18 Section 11343, 49 U.S.C. § 11848 ......................... 18 Labor Management Relations Act, 29 U.S.C. 151, CO BOQ, ..0..vnennccencaicepceapensenuneect tian 2 Section 301 (a), 29 U.S.C. § 185(a) .................... passim Minnesota Uniform Fraudulent Transfer Act, Minn. Stat. Ann. $9 613.4167 2. 2,6 Pennsylvania Fraudulent Conveyance Act, 39 Pa. C.S.A. § 3651, e€ a6@. Uo 16 Railway Labor Act, 45 U.S.C. § 151, et segq............. 2 Section 8, 45 U.S.C, £768 ee 15, 17 vii TABLE OF AUTHORITIES—Continued Page H.R. Conf. Rep. No. 93-1280 (1974) ............--.------. 14 Bae Bee Oo. . 6 ) en SORE 2 BR USAC. © 1881 ..............--...-00.-200.-eece--nnnseonsnnnenoreenenes 12,13 28 U.S.C. § 1887 (a) .......-.--.-----..-----csccceeenecsenennensnnneeeres 12 ok gh SE) CLS i eecronr rr 3, 12, 138 a RE ciscaseecsninsssoses eee 7 28 U.S.C. § 2101(c) . el RET Ei 2 49 C.F.R. § 1150.35(a). (1989) . Fee RAR Rene 5 49 C.F.R. § 1150.35(e) (1989) 5) 49 C.F.R. § 1150.31(b) (1986) D IN THE Supreme Court of the United States OCTOBER TERM, 1988 No. ROBERT F. DEFORD, RAILWAY LABOR EXECUTIVES’ ASSOCIATION and UNITED TRANSPORTATION UNION, Petitioners, V. Soo LiNE RAILROAD COMPANY, et al., Respondents.' PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT Petitioners Robert F. Deford, the Railway Labor Executives’ Association [hereinafter, “RLEA”], and the United Transportation Union [hereinafter, “UTU’’] 2 respectfully request that this Court issue a writ of cer- tiorari to review the judgment and opinion of the United States Court of Appeals for the Eighth Circuit entered Besides respondent Soo Line Railroad Coompany, the other respondents are: Wisconsin Central Ltd., Dennis Cavanaugh, Ed- ward A. Burkhardt, Thomas F. Power, and Robert H. Wheeler. 2 RLEA is a voluntary unincorporated association of the chief executive officers of seventeen standard national labor organizations which represents railroad employees in the United States. Petitioner UTU’s president was a member of RLEA at the time this suit was filed, but, as of mid-April 1989, he is no longer a member of RLEA. Since the UTU is still participating in this action, it has been listed as a petitioner. Appendix F hereto at 59a is a list of RLEA’s present member organizations. — ; 2 on February 9, 1989 in Deford v. Soo Line R.R., et al., 867 F.2d 1080 (8th Cir. 1989). OPINIONS BELOW The opinion of the Court of Appeals for the Eighth Circuit is reported at 867 F.2d 1080 and is reprinted as Appendix A hereto at la-28a. The court’s judgment was also entered on February 9, 1989; it is printed in Ap- pendix C hereto at 35a-36a. The August 20, 1987 ruling of the United States Dis- trict Court for the District of Minnesota (Rosenbaum, J.) was issued orally from the bench; there was no writ- ten opinion. The relevant excerpts of the transcript of proceedings are printed as Appendix B hereto at 29a-34a. The District Court’s judgment is printed in Appendix D hereto at 37a. JURISDICTION The United States Court of Appeals for the Eighth Circuit entered its decision on February 9, 1989. Peti- tioner has not sought rehearing and is filing this peti- tion within the time prescribed by 28 U.S.C. § 2101 (c). Petitioners seek to invoke the jurisdiction of this Court under 28 U.S.C. § 1254(1). STATUTES INVOLVED The complaint underlying this action was brought under the Minnesota Uniform Fraudulent Transfer Act (hereinafter, “Fraudulert Transfer Act’’], Minn. Stat. Ann. §§ 513.41-51, and was filed in Minnesota District Court, Hennepin County. The complaint was removed to the United States District Court for the District of Minnesota, Fourth Division, pursuant to 28 U.S.C. §1441(a), purportedly under the Railway Labor Act (hereinafter, “RLA”], 45 U.S.C. § 151, et seq., and the Interstate Commerce Act (hereinafter, “ICA”], 49 U.S.C. § 10101, et seg. Relevant portions of those stat- 9 0 utes are reprinted as Appendix E hereto at 39a-58a. Petitioners have also reproduced in Appendix E, Section 301(a) of the LMRA, 29 U.S.C. § 185(a), and Sections 502(a) and (f) of ERISA, 29 U.S.C. § 1182(a and (f). STATEMENT OF THE CASE The complaint in this case challenged the sale of cer- tain assets of respondent Soo Line Railroad Company {hereinafter, ‘“Soo’] as a fraudulent transfer, and was brought in a Minnesota court under that State’s Fraudu- lent Transfer Act. The complaint was removed to the District Court on the ground that enforcement of the Fraudulent Transfer Act was pre-empted by two federal statutes, the RLA and the ICA. A divided panel of the Eighth Circuit held that the pre-emptive force of each of those statutes was so great that the Minnesota court lacked jurisdiction even to decide whether the state stat- ute was indeed pre-empted. The divided panel then held that each federal statute pre-empted the operation of the state law. The decision runs contrary to this Court’s careful de- lineation in several cases of the narrow circumstances and “unique” statutes which fall within the “complete pre-emption doctrine” under which a purported state cause of action is in reality a federal cause of action and thus, subject to removal under 28 U.S.C. § i441. The decision also conflicts with the decision of the United States Court of Appeals for the Third Circuit in Rail- way Labor Executives’ Association v. Pittsburgh & Lake Erie Railroad Co., et al., 858 F.2d 936 (3rd Cir. 1988), which held that neither federal statute has such complete pre-emptive force. Additionally, the panel’s conclusion that the RLA and ICA pre-empted the State’s Fraudulent Transfer Act, requiring the dismissal of the complaint, is contrary to prior decisions of this Court. A. The Railroad Line Sale Soo is a class one railroad and the nation’s tenth largest rail system. Prior to the sale which gave rise to 4 this suit, respondent Soo operated a rail system of over 7,500 miles of track, including 1,960 miles of track in the states of Wisconsin, Minnesota, Illinois and upper Michi- gan known as the Lake States Transportation Division (hereinafter, “Lake States”|.* Appendix A at 2a. On April 2, 1987, Soo agreed to sell Lake States to Wis- consin Central, Limited [hereinafter, ‘Wisconsin Cen- tral”], a railroad formed solely to purchase and operate Lake States. Wisconsin Central was not a rail carrier prior to its formation and purchase of Lake States. Jd. at 2a-3a. This sale was structured as a _ leveraged buy-out whereby Wisconsin Central contributed little equity in its investment and borrowed virtually the entire pur- chase price; Wisconsin Central’s lenders took a first lien on all Lake States assets. Jd. at 3a-4a. As collateral for the loan, Wisconsin Central pledged Lake States’ assets that, up to that point, had been available to Soo’s un- secured creditors. The particulars of the transaction are unknown to petitioners since Soo refused to disclose them in this proceeding and has published only fragmentary information concerning the sale. The Interstate Commerce Commission [hereinafter, “TCC” or “Commission”’], which has jurisdiction of transfers of railroad assets, has held that transactions such as the subject transaction are governed by 49 U.S.C. § 10901, which requires ICC approval before such 3 Respondent Soo’s rail system in 1987 was a combination of the Soo as it existed in 1984 and over 3,000 miles of trackage which the carrier acquired on February 19, 1985, from the Chicago, Mil- waukee, St. Paul & Pacific Railroad Company. In re Chicago, Mil- waukee, St. Paul & Pac. R.R., 799 F.2d 317 (7th Cir. 1986), cert. denied, 107 S. Ct. 2460 (1987). The vast majority of the Lake States Division lines were Soo trackage prior to the Milwaukee acquisition. 5 transactions can be consummated. However, the ICC exercised its authority under 49 U.S.C. § 10505 and exempted the entire class of transactions like the Soo- Wisconsin Central transaction from prior regulation under the ICA. Ex Parte No. 392 (Sub-No. 1), Class Exemp- tion for the Acquisition and Operation of Rail Lines under 39 U.S.C, 10901 [hereinafter, “Ex Parte 392’'| 1 I.C.C. 2d 810 (1986), aff'd sub nom. Illinois Commerce Commission v. ICC, 817 F.2d 145 (D.C. Cir. 1987) (table). See Appendix A at 16a. In accordance with the ICC’s Ex Parte 392 procedures, Wisconsin Central filed a notice of exemption on September 4, 1987.4 The ICC stayed the effectiveness of the exemption through Octo- ber 27, 1987 to investigate the transaction, but later lifted the stay while continuing to review the matter. Jd. at 3a. Petitioner Robert F. Deford is a union represented employee of the Soo, who alleged in the complaint that he has present and future matured and unmatured claims for accrued but unpaid wages, vacation pay, in- surance, and severance pay. Deford brought his com- plaint on his own behalf, and on behalf of a class of similarly situated Soo employees, as creditors seeking to protect their claims under the Fraudulent Transfer Act. Petitioner RLEA sought to protect the claims of its con- stituent member organizations, and the employees they represent, as creditors of the Soo with respect to wages, welfare benefits, dues “check offs”, and other matured and unmatured claims under various collective bargain- ing agreements. Jd. at 4a-5a. # Under the ICC regulations which existed when Wisconsin Cen- tral filed its verified notice, the exemption was effective seven (7) days after the notice was filed. 49 C.F.R. § 1150.31(b) (1986). On February 29, 1988, the ICC modified its Ea Parte 392 regulations to require that at least thirty-five (35) days’ advance notice be given for sales such as the one in this case. 49 C.F.R. § 1150.35(a) and (e) (1989). B. The Complaint On June 12, 1987, Deford and RLEA brought this action in Minnesota state court against respondent Soo, Wisconsin Central and several individuals,® asserting fraudulent conveyance claims under Minnesota common law and the Minnesota Uniform Fraudulent Transfer Act, Minn. Stat. Ann. §§ 518.41-51. (See Appendix E hereto, at 55a-56a. ) The complaint alleged that the sale of Soo’s Lake States division: —constituted an attempt to hinder, delay, or defraud Soo’s Lake States employees and RLEA of their rights as existing Soo creditors. Joint Appendix in 8th Cir. No. 87-5376 [hereinafter, “J.A.”] (J.A. at 26) ; —was not fair consideration and left Soo with unreasonably small capital for future operations (J.A. at 27) ; and —constituted a conspiracy to frustrate their rights as ereditors and tortious interference with their rights as creditors (J.A. at 33). The complaint asserted that the purpose and effect of the Lake States sale was to circumvent, not breach, Soo’s obligations to empleyee and union creditors. (J.A. at 33). C. The District Court Decision On July 1, 1987, the defendant railroads, claiming federal question jurisdiction, removed the action to the United States District Court for the District of Min- nesota and moved to dismiss the complaint, asserting complete federal pre-emption by the RLA and ICA. On 5 At the time this suit was filed, respondent Dennis M. Cava- naugh was Chairman and Chief Executive Officer of the Soo; respondents Edward A. Burkhardt, Thomas Power, and Robert H. Wheeler were officers or directors of Wisconsin Central; re- spondent Richard B. Ogilvie has since died; and respondent “John Doe” includes unknown investors or lenders, among others. J.A. at 11. 7 July 10, 1987, plaintiffs moved under 28 U.S.C. § 1447 for a remand of the action to state court. On August 20, 1987, United States District Judge James M. Rosenbaum denied petitioners’ motion to re- mand and granted the railroads’ motion to dismiss, rul- ing that the fraudulent conveyance claims “are deter- mined by their [collective bargaining] contracts with the railroads, [and therefore] these claims are governed by the Railway Labor Act.” (Appendix B at 32a). Find- ing that rights created by the collective bargaining agree- ments were “essential elements” of the fraudulent con- veyance claims, Judge Rosenbaum concluded that the ar- bitration panels of the National Railroad Adjustment Board [hereinafter, “NRAB”], set up by the RLA to re- solve so called “minor disputes” (disputes over the inter- pretation or application of collective bargaining agree- ments), are the exclusive fora for these claims: Where, as in this case, the dispute arises out of the employment relationship and, in the final anal- ysis, involves an attempt to impose a right claimed to be incident to that relationship, the statutory forum is the NRAB. Id. at 33a. D. The Court of Appeals Decision A divided panel of the Eighth Circuit, with Chief Judge Lay dissenting, agreed with the district court that the RLA completely pre-empts petitioners’ fraudulent conveyance claims; the panel additionally held that the ICA also completely pre-empted these state law claims. 1. RLA Pre-emption While acknowledging that a defense of federal law, including federal pre-emption, traditionally is not a basis for removal, the court of appeals said that this action involved “a significant exception to the general rule known as the ‘complete pre-emption doctrine.’ ” Appendix 8 A at 7a. The court of appeals concluded that “the RLA ‘pervasively occupies’ the field of railroad labor disputes, completely pre-empting state law claims arising out of collective bargaining agreements.” Jd. at 8a. The court of appeals found that this fraudulent conveyance claim is a “minor dispute” within the exclusive jurisdiction of the NRAB because “the creditors’ rights asserted are based upon the terms of the collective bargaining agree- ments .... éd@, at 1aa. The court acknowledged that the Third Circuit “has recently addressed this issue and reached the opposite result.” Jd. at 10a. However, the panel majority chose not to follow the Third Circuit’s decision, concluding that the “history and purpose” of the RLA demonstrated that Congress intended it to be a complete pre-emption stat- ute. 7d. at lla. The panel majority then ruled that the RLA pre-empted the complaint because “[t]he existence and extent of the creditors’ rights asserted by Deford and by the RLEA ... can be determined only by interpret- ing the collective bargaining agreements.” Jd. at 12a. The court did not, however, identify any question of interpretation of any collective bargaining agreement involved in these claims.® 2. ICA Pre-emption The court of appeals also held that the ICA “so per- vasively occupies the field of railroad governance that it completely pre-empts Deford’s state law claims” and to support that conclusion, the court relied upon the ®To support its conclusion that rail labor’s complaint was actually one involving the interpretation of collective bargaining agreements, the Eighth Circuit looked to RLEA’s suit against the Soo and Wisconsin Central which was pending in the United States District Court for the Northern District of Illinois (Civil Action No. 87 C 5293, RLEA v. Soo) in which RLEA sought to enforce the arbitration provisions of certain employee protective agreements and the RLA’s prior notice, bargaining and status quo commands. See, Appendix A at 12a-13a. 9 “nature and purpose of the ICA” as well as the authority it confers on the ICC. Jd. at 15a-16a. Noting that the ICC is authorized by the ICA to consider the financial aspects of a sale of a railroad line, and the impact of a sale on all employees, the court said that to “allow Deford to now bring a state law action would be to dis- regard the ICC’s authority and expertise in this matter.” Id. at 17a. In short, maintenance of Deford’s state law fraudulent conveyance claim was held by the court of appeals to be inconsistent with the authority of the ICC. The Eighth Cireuit said (id. at 18a) : Consequently, the ICC provides a forum in which Deford may seek further relief and review com- plaints or requests for revocation of the class exemp- tion and imposition of labor protective conditions that might be submitted by Deford or the RLEA. The Court concluded that “this action is a collateral at- tack upon the ICC’s decision to exempt the Lake States Division sale from regulation.” Jd. at 1a. 3. The Dissent In his dissenting opinion, Chief Judge Lay disagreed with the majority’s conclusion that the Fraudulent Transfer action involved a minor dispute pre-empted by the RLA because the claims were derived from obliga- tions arising under collective bargaining agreements. Judge Lay cited this Court’s decision in Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. , 100 L. Ed.2d 410 (1988), which he said “recently addressed the error” of the majority’s reasoning. Appendix A at 23a. He noted that in Lingle, a case involving Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, this Court had “held ‘that an application of state law is pre-empted by § 301 only if such application requires the interpreta- tion of a collective-bargaining agreement.’” Id., quoting Lingle, supra at 420 (emphasis in original). Judge Lay observed that this Court had further held that: 10 “TA] state law claim may depend for its resolu- tion upon both the interpretation of a collective- bargaining agreement and a separate state law anal- ysis that does not turn on the agreement. In such a case, federal law would govern the interpretation of the agreement, but the separate state law analysis would not be thereby pre-empted.” Id. at 24a, quoting Lingle, supra at 423 n.12. He con- cluded that in the instant case, the RLA does not pre-empt Deford’s complaint since (id.) : Interpretation of the collective bargaining agree- ment is required only to determine standing as a creditor, and to determine the amount of damages. The state statute creates an entitlement independent of the collective bargaining agreement, and is not pre-empted by the RLA. As to the ICA, Judge Lay concluded that that statute “is not as pervasive in scope as either section 301 of the LMRA or section 502(a) of ERISA,” the only two stat- utes which this Court has found to be complete pre- emption statutes, and that the ICA therefore “does not completely pre-empt state law.” Jd, at 24a-25a. Further- more, Judge Lay noted that the ICC had exempted Wis- consin Central’s purchase of Lake States from regulation and thus “the ICC did not in fact reach the merits of the fraudulent conveyance claims.” Appendix A at 27a. Judge Lay concluded that any pre-emptive force of either the RLA or the ICA “is not of the magnitude necessary to completely pre-empt state law so as to create removal jurisdiction.” Jd. at 28a. REASONS FOR GRANTING THE WRIT This case presents important issues concerning the cen- tury-old jurisdictional framework governing removal of federal question cases from state courts into federal courts. In particular, this case involves the extent to which a defendant in a state court proceeding may ask a federal court to assert jurisdiction over state law 11 causes of action where the defendant raises a-federal regulatory statute as a defense to enforcement of the relevant state law. While this Court has recognized in certain, narrowly drawn circumstances, that Congress has so pervasively regulated a particular field of conduct that any cause of action dealing with that regulated field is necessarily one arising under federal law, the Eighth Circuit has expanded this “complete pre-emption” doc- trine without any clear showing of a congressional intent to so pervasively occupy the field that state courts are deprived of jurisdiction to consider the underlying pre- emption issue. Indeed, in expanding this doctrine, the court of appeals relied upon two federal statutes which do not, on their faces, or in their legislative histories, purport to have such pervasive effects. Petitioners re- spectfully submit that this expansion of the complete pre-emption doctrine is contrary to applicable decisions of this Court, in particuiar Caterpillar Inc. v. Williams, 482 U.S. 386 (1987), and Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987). Moreover, the Eighth Cir- cuit’s decision is in conflict with a decision by the Third Circuit in a case virtually identical to the one at bar— RLEA v. Pittsburgh & Lake Erie R.R., 858 F.2d 936 (3rd Cir. 1988). As we explain below, this Court should grant the writ to eliminate this conflict on an important issue of federal-state relationships. I. THE PANEL DECISION IS INCONSISTENT WITH THE LIMITED SCOPE OF THE COMPLETE PRE- EMPTION DOCTRINE AND WITH THIS COURT’S REASONING IN COMPLETE PRE-EMPTION CASES Federal courts are courts of limited jurisdiction and, thus, unless Congress has given the United States Dis- trict Courts jurisdiction to consider the subject matter of a suit, those courts do not have such jurisdiction. As relevant here, Congress has conferred original jurisdic- tion on the district courts to consider civil actions “aris- ing under the Constitution, laws, or treaties of the 12 United States” (28 U.S.C. § 1331), and, in particular, original jurisdiction over any civil action “arising under any Act of Congress regulating commerce... .” 28 U.S.C. § 1337(a). Federal question jurisdiction, more- over may be invoked at the discretion of a defendant, if a suit is filed in a State court for under 28 U.S.C. § 1441(a) “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the... defendants, to the district court of the United States for the district . . . embracing the place where such action is pending.” As this Court has emphasized before, however, “a cause of action arises under federal law only when the plaintiff’s well-pleaded complaint raises issues of fed- eral law.” Metropolitan Life Insurance Co. v. Taylor, supra, 481 U.S. at 63 (emphasis added). This well- pleaded complaint “rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.” Caterpillar Inc. v. Wil- liams, supra, 482 U.S. at 392 (footnote omitted). Frequently, defendants seek to involve the federal courts in state law suits by asserting that the state law claim is pre-empted by a federal law. However, since 1887, such a defense does not authorize removal to federal court, for as this Court has stated: [I]t is now settled law that a case may not be re- moved to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff’s com- plaint, and even if both parties concede that the federal defense is the only question truly at issue. Caterpillar, 482 U.S. at 393. There is, nevertheless, one important caveat to this “principle,” for a corollary to the ‘“‘well-pleaded complaint rule” is that: “Congress may so completely pre-empt a particular area, that any civil complaint raising this select group of claims is neces- sarily federal in character.” Metropolitan Life, 481 U.S. at 63-64. 13 This exception—i.e., the “complete pre-emption” doc- trine—is rare, and will be found to exist only where it can be concluded that the “pre-emptive force of a statute is so ‘extraordinary’ that it ‘converts’ an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Cater- pillar, 482 U.S. at 393, quoting Metropolitan Life, 481 U.S. at 65. In the area of labor relations, complete pre- emption has been found to exist under only two statutory provisions—Section 30l(a) of the LMRA, 29 U.S.C. $185(a), and Section 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a) (1) (B). Metropolitan Life, supra; Avco Corp v. Aero Lodge No, 735, IAM, 390 U.S. 557 (1968). In this case, though, the Eighth Circuit has expanded this select group of statutes, but has done so for reasons which ignore both the purposes underlying the complete pre-emption doctrine and the way in which Congress and this Court have carefully limited the ability of the fed- eral courts to intrude into state iaw causes of action. This Court has emphasized in Metropolitan Life that the “touchstone” of the complete pre-emption doctrine is the intent of Congress to make causes of action touching upon a particular area of regulation removable to the federal courts. 48i U.S. at 66. Whether or not a partic- ular cause of action under state law is pre-empted by the federal regulation, even if such preemption is “obvi- ous,” is not determinative (id.); rather, the crucial in- quiry is whether Congress intended to make its regula- tion “so powerful” as to displace any state cause of ac- tion governing the same conduct as regulated by Con- gress. Franchise Tax Board v. Laborers Vacation Trust, 463 U.S. 1, 23 (1983). If such an intent is present, then the cause of action is “purely a creature of federal law” (id.), and, thus, one arising under federal law within the meaning of 28 U.S.C. § 1821. In the two situations where this Court has found ‘“‘com- plete pre-emption” in the labor relations area, there existed 14 clear manifestations of congressional intent. In Avco Corp. v. Aero Lodge No. 735, IAM, supra, 390 U.S. at 559-60, this Court reiterated its earlier conclusion in Textile Workers v. Lincoln Mills, 353 U.S. 448 (1957), that Congress intended Section 301(a) of the LMRA to give the federal courts the power to fashion “federal law,” based on federal labor policies, when enforcing collective bargaining agreements. Consequently, a suit to erforce a collective bargaining agreement, even though brought in a state court, is an action controlled by federa! substan- tive law and, thus, removable to federal court. 390 U.S. at 560. Similarly, in Metropolitan Life, this Court looked to congressional intent to determine if Section 502/(a) (1) (B) of ERISA had a complete pre-emptive effect. After observing that in “the absence of explicit direction from Congress, th[e] question [of whether Section 502(a) (1) (B) had such an effect] would be a close one” (Metro- politan Life, 481 U.S. at 64), this Court examined ERISA’s legislative history to ascertain that intent. Jd. at 65-66. As this Court found, the civil enforcement pro- vision of ERISA, Section 502(f), parallels $ 301 of the LMRA by providing district courts with jurisdiction to adjudicate claims for benefits under ERISA. Additionally, the Conference Report on ERISA stated that all actions brought under § 502(a) “are to be regarded as arising under the laws of the United States in similar fashion to those brought under § 301” of the LMRA. H.R. Conf. Rep. No. 93-1280 at 327 (1974). That legislative history was determinative, for: No more specific reference to the Avco rule can be expected and the rest of the legislative history con- sistently sets out this clear intention to make § 502 (a)(1)(B) suits brought by participants or benefi- ciaries federal questions for purposes of federal court jurisdiction in like manner as § 301 of the LMRA. 15 Metropolitan Life, 481 U.S. at 66. No such indication of congressional intent exists under either the RLA or ICA. A. RLA Pre-Emption This Court has long recognized that Section 3 of the RLA, 45 “U.S.C. $153, gives the adjustment boards created under that statutory provision “exclusive” juris- diction to resolve disputes “growing out of grievances or out of the interpretation or application of” collective bar- gaining agreements between a railroad and its employees —i.e., “minor disputes.” Slocum v. Delaware, Lacka- wanna & Western R.R., 339 U.S. 239 (1950); Order of Railway Conductors v. Pitney, 326 U.S. 561 (1946). Since Congress has given the adjustment boards this jurisdic- tion, no court, neither a state nor a federal court, has ju- risdiction “to invade the jurisdiction conferred on the Adjustment Board by the Railway Labor Act.” Slocum, 339 U.S. at 244." Centering upon this intent of Congress to keep “minor disputes” out of the courts, the Eighth Circuit concluded that “the RLA’s preemptive force is so extraordinary that it takes over the whole field of railroad labor disputes arising from collective bargaining agreements.” Appendix A at 10a. And to support that conclusion, the appellate court equated Section 3 of the RLA to Section 301 of the LMRA, adding that because Section 3 of the RLA “has essentially the same function as section 301 of the LMRA” (Appendix A at 10), this Court’s decision in Avco “should also apply to the RLA.” Zd. By equating Section 3 of the RLA to Section 301 of the LMRA, the Eighth Circuit ignored the crucial differences between the two statutory schemes. Section 3 of the RLA ‘Since no court has jurisdiction to resolve a dispute involving solely the interpretation of an RLA collective bargaining agree- ment, it follows that a suit to enforce such an agreement in state or federal ceurt cannot be one “arising under” federal law. 16 gives the adjustment boards’ exclusive jurisdiction to in- terpret railroad collective bargaining agreements, but, un- like Section 301 of the LMRA, it does not give federal courts jurisdiction to construe or to enforce such collec- tive bargaining agreements; nor does it authorize those courts to develop a body of federal law implementing our national labor policies. See, Textile Workers v. Lincoln Mills, supra, 353 U.S. at 456-57. Consequently, Section 3 of the RLA lacks the pervasive nature of Section 301 which this Court concluded in Avco showed a congres- sional intent to make any suit to enforce an NLRA col- lective bargaining agreement a federal cause of action. But even in Section 301 cases, a state law claim is not pre-empted, and thus, does not become a federal cause of action, where the state claim is “independent” of the col- lective bargaining agreement—i.e., where “resolution of the state-law claim does not require construing the collective-bargaining agreement.” Lingle v. Norge Divi- sion of Magic Chef, Inc., 486 U.S. , 100 L. Ed.2d 410, 420 (1988). As Chief Judge Lay noted in his dissent in this case, petitioners’ claims under the Minnesota Fraudulent Transfer Act do not require the state court to construe the coll.ctive bargaining agreements, but rather, require the interpretation of the State’s statute. Appendix A at 24a. Under that state statute, which is the Uniform Fraudulent Transfer Act that has been en- acted by many states, including Pennsylvania,* a plaintiff seeking relief under that Act need not establish the validity of a claim or have final judgment on a claim. F.9., Baker v. Geist, 457 Pa. 73, 321 A.2d 635 (1974); Babcock v. Tam, 156 F.2d 116 ‘9th Cir. 1946) ; see also, Neubauca v. Clontier, 265 Minn. 539, 122 N.W.2d 623 (1963); BBCA, Inc. v. United States, 630 F. Supp. 349 (D. Minn. 1986). § Pennsylvania Fraudulent Conveyance Act, 39 Pa. C.S.A. § 351, et seq.; this Act was the state statute involved in RLEA v. Pitts- burgh & Lake Erie R.R., supra. es 17 However, even if the validity of the employees’ claims were disputed, and the resolution of that dispute was relevant to the ultimate application of the state statute, that fact would not oust the state court of jurisdiction over the Fraudulent Transfer claim. This is so, because as this Court noted in Lingle (100 L. Ed.2d at 423 n.12) ; |A]s a general proposition, a state law claim may de- pend for its resolution upon both the interpretation of a collective-bargaining agreement and a separate state law analysis that does not turn on the agree- ment. In such a case, federal law would govern the interpretation of the agreement, but the separate state law analysis would not be thereby pre- empted.... Thus, whether or not Section 3 of the RLA is a complete pre-emption statute required a much more thorough anal- ysis than was employed by the Eighth Circuit. That analysis should have examined the fact that the adjust- ment boards have no power to construe or to enforce the rights which the State’s Fraudulent Transfer Act gives all creditors, whether they are employees or mortgagors, since the complete pre-emption decisions of this Court are all consistent with this principle: federal statutes displace state-law claims only when the federal statute provides a federal cause of action to replace the state claim. Con- gress has provided no such substitute in the RLA to aid employees or other creditors in protecting the security for their claims. B. ICA Pre-Emption Although Congress has been regulating our nation’s railroads through the ICA for over a century, no appel- late court, until this case, has ever held that the ICA so completely pre-empts state laws as to make a state cause of action a federal cause of action. Indeed, while this Court has observed that the ICA “is among the most per- vasive and comprehensive of federal regulatory schemes” (Chicago & North Western Transportation Co, v. Kalo 18 Brick & Tile Co., 450 U.S. 311, 318 (1981)), it has stopped far short of finding a complete pre-emptive ef- fect. Compare, Kalo Brick, 450 U.S. at 331-32 (state cause of action precluded where ICC reached merits of claim, but Court “reserve[d] for another day the ques- tion whether such a cause of action lies when no applica- tion is made to the Commission”), and, Hayfield Northern R.R. v. Chicago & North Western Transportation Co., 467 U.S. 622 (1984) (ICA does not pre-empt state eminent domain law which applied after carrier had exercised ICC authority and abandoned line). Moreover, even where Congress has expressly provided that an ICC order pre- empts state law, such as in 49 U.S.C. $ 11341(a), this Court has concluded that the forum called upon to enforce that state law—i.e., the state court—has jurisdiction to determine whether the state law is in fact pre-empted by the ICA. Seaboard Air Line R.R. v. Daniel, 333 U.S. 118, 122-23 (1948); see also, ICC v. BLE, 482 U.S. 270, 300 n.13 (1987) (Stevens, J., concurring). In short, if the ICA was a complete pre-emption statute, that effect would have been recognized long-ago. The fact that it has not been so noted shows that the Eighth Circuit’s analysis was flawed. The incongruity of the Eighth Circuit’s complete pre- emption rulings is highlighted by its conclusion that two distinct federal statutes, with decidedly different purposes, each completely pre-empts the same state law. No pre- vious case has held that there can be such dual pre- emption by different statutes. In this Court’s previous complete pre-emption cases, the parties whose state rights were pre-empted had a single, obvious alternative forum to air their grievance and a specific remedy authorized by federal law. Here, to the contrary, neither the NRAB nor the ICC is a forum dedicated or even charged to hear fraudulent conveyance claims or to protect the interests of railroad creditors. — 19 Il. THE DECISION OF THE DIVIDED EIGHTH CIR- CUIT PANEL CONFLICTS WITH A THIRD CIR- CUIT DECISION IN A VIRTUALLY IDENTICAL MATTER AND WITH THE DECISIONS OF OTHER COURTS As the panel acknowledged in its divided decision be- low (App. A at 10a), its conclusion that the RLA is a complete pre-emption statute was contrary to the Third Cireuit’s analysis of a similar issue in RLEA v. Pitts- burgh & Lake Erie R.R. [hereinafter, “P&LE”], 858 F.2d 936 (3rd Cir. 1988). Additionally, the panel’s con- clusion that the ICA is a complete pre-emption statute is also contrary to the Third Circuit’s P@LE decision which concluded on identical facts that the ICA is not a com- plete pre-emption statute. Because as we explain below, the issues of whether the RLA and ICA completely pre- empt rail labor’s ability to protect the creditor status and security of employee claims is an important and recur- ring issue in the rail industry today, this Court should resolve this direct conflict between the circuits. P&LE, like this case, involved a state law fraudulent conveyance challenge to a railroad’s sale of assets to a noncarrier pursuant to an exemption granted under 49 U.S.C. § 10505 from ICC regulation under 49 U.S.C. $ 10901. Rail labor brought the P&LE case in state court, but the railroad defendants removed that action to federal district court and then moved to dismiss, alleg- ing that the RLA and the ICA pre-empted the state fraudulent transfer claims. As in this case, RLEA sought a remand of the complaint to state court and op- posed the motion to dismiss. RLEA was unsuccessful ini- tially, for the district court agreed with the railroads, denied the motion to remand, and dismissed the com- plaint. That judgment was reversed by the Third Circuit which held that the district court was without subject matter jurisdiction and that the case must be remanded to the state court where the railroads could assert their pre-emption argument as a defense to the complaint. 858 F.2d at 944. 20 In P&LE, the Third Circuit relied heavily on this Court’s analysis in Metropolitan Life and Avco to con- clude that neither the ICA nor the RLA is a complete pre-emption statute (858 F.2d at 939-942), noting that this Court has relied upon the establishment of “civil en- forcement provision[s]” in the LMRA and ERISA, as well as “clear indication[s] of Congressional intention [s] to permit removal despite the plaintiff’s exclusive reliance on state law” in finding those statutes to be complete pre-emption statutes. 858 F.2d at 942. The Third Circuit also relied upon this Court’s decision in Caterpillar, not- ing that this Court “emphasized that complete preemp- tion is a distinct concept from ordinary preemption: ‘The fact that a defendant might ultimately prove that a plain- tiff’s claims are preempted under the NLRA does not establish that they are removable to federal court.’”’ 858 F.2d at 941, quoting Caterpillar, 482 U.S. at 398. Based upon its review of this Court’s precedent, the P&LE Court held that the RLA is not a complete pre- emption statute, stating “we find no evidence in the RLA or its legislative history of a congressional intent to per- mit recharacterization and removal of what purports to be a state claim.” 858 F.2d at 939, 942. The P&LE Court also held that the ICA is not a com- plete pre-emption statute giving rise to federal court re- moval jurisdiction. The court stated: The ICA, like the RLA contains no civil enforcement provisions creating a federal cause of action in favor of one in the position of RLEA or the employee credi- tors. Likewise, we find no affirmative evidence in the ICA or its legislative history that Congress intended state claims of this kind to be removable. Indeed, we have found no case or commentary even suggest- ing that there may be complete preemption under the ICA. For these reasons, we hold that the district court is without authority to recharacterize the state cause of action pleaded by RLEA as a federal cause of action arising under the ICA. 21 858 F.2d at 942. That decision, on both statutes, is in direct conflict with the Eighth Circuit’s holdings and reasoning. The divided panel’s decision here regarding the pre- emptive effect of the RLA also conflicts with the Ninth Cireuit’s decision in Price v. PSA, Inc., 829 F.2d 871 (9th Cir. 1987), cert. denied, 108 S.Ct. 1732 (1988). In Price, the defendant employer claimed that the plaintiff employee’s state law wrongful discharge claims were completely pre-empted by the RLA. The Price court, using a complete pre-emption analysis similar to that argued by petitioners below, held that the RLA is not a complete pre-emption statute, and stated “Congress has not indicated, as it did with LMRA § 301 and ERISA, that the RLA is ‘so powerful as to displace entirely any state cause of action.’” 829 F.2d at 876, quoting, Fran- chise Tax Board v. Construction Laborers Vacation Trust, supra, 463 U.S. at 23.° In short, there is a square conflict among the circuits on these important issues of law. III. EXPANSION OF THE COMPLETE PRE-EMPTION DOCTRINE, AND THE RELATED CONTRACTION OF SUBSTANTIVE STATE LAW, IS A MATTER OF NATIONAL IMPORTANCE AND CONCERN This case arises because of the overly-leveraged nature of Soo’s sale of Lake States to Wisconsin Central. The ®The Eighth Circuit’s decision on the pre-emptive effect of the RLA and ICA also conflicts with a decision of the United States District Court for the Northern District of Illinois in Gendron v. Chicago & Northwestern Transportation Co. (unreported decision rendered from bench by Shadur, J., April 7, 1988) (that decision is reproduced herein as Appendix G.) Gendron involves, as here and in P&LE, a challenge by a railroad creditor under the Illinois Fraudulent Conveyance Act to a railroad’s ICC-exempted sale of a portion of its line to a nonearrier. The district court recognized the “importance of the issues” and stated that these “are obviously recurring matters.” Relying on Price, 829 F.2d 871, the district court held that the RLA is not a complete pre-emption statute. The court also held that the ICA is not a complete pre-emption statute. Appendix G at 65a. 22 leveraged buy-out, and indeed the overly leveraged buy- out, are phenomena of our times. These transactions take assets that, up to the point of sale, were available to the seller’s unsecured creditors to satisfy claims, and pledge them to the buyer’s lenders. In other words, the subject assets are taken out of the reach of the unsecured creditors of the seller, sometimes improperly. United States v. Gleneagles Inv. Co., Inc., 565 F. Supp. 556 (M.D. Pa. 1983). As long as businesses, especially busi- nesses in financial trouble, continue to engage in overly- leveraged sales of assets, their unsecured creditors will turn to fraudulent conveyance actions to protect their rights. See, United States v. Tabor Realty Corp., 803 F.2d 1288, 1287 (3rd Cir. 1986), cert. denied sub nom. McClellan Realty Co. v. United States, 107 S. Ct. 3229 (1987). This phenomenon is now spreading to the rail industry (see, ICC Docket Ex Parte 480, served May 2, 1989), and for Class I railroads which find themselves in financial trouble, these transactions seem attractive and probably will continue. As long as they do, creditors of the railroads will seek fraudulent conveyance relief and will be confronted with ICA pre-emption arguments, as well as RLA pre-emption arguments if they are cov- ered by collective bargaining agreements. But the most significant portent of the Eighth Cir- cuilt’s decision goes beyond the RLA and ICA. If the Eighth Circuit is correct, a dramatic expansion of the complete pre-emption doctrine must occur. There are numerous other examples of federally regulated indus- tries, especially those under licensing statutes, where regu- lated businesses will contend they are now free of state law constraints applicable to every other business. Many existing state laws may fall. F.g., Baltimore & Ohio R.R. v. Oberly, 8837 F.2d 108 (3rd Cir. 1988) (state noise control statute not pre-empted by Federal Noise Control Act); Cresenzi Bird Importers, Inc. v. New York, 658 F. Supp. 1441 (S.D.N.Y. 1987) (license under federal 23 Endangered Species Act does not pre-empt regulation under New York Wild Bird Law.) In this case, Soo employees have been left without a means to vindicate the state interest expressed in the Fraudulent Transfer Act, for neither the adjustment boards nor the ICC can consider or enforce those rights. But more important to this writ, the courts of the State of Minnesota have been deprived of their right to decide in the first instance whether the State’s statute is pre- empted by the federal laws. Neither congress nor this Court has sanctioned such an expansion of federal juris- diction, and due to the square conflict in the circuits on this important issue, this Court should determine whether the Eighth Circuit was correct in expanding the complete pre-emption doctrine. CONCLUSION For the reasons set forth above, the writ should be granted. Respectfully submitted, WILIAM G. MAHONEY JOHN O’B. CLARKE, JR.* RICHARD S. EDELMAN HIGHSAW & MAHONEY, P.C. Suite 210 1050 17th Street, N.W. Washington, D.C. 20036 (202) 296-8500 TIMOTHY D. KELLY 3720 IDS Center 80 South Eighth Street Minneapolis, MN 55402 (612) 349-6171 Attorneys for Petitioners Date: May 10, 1989 * Counsel of Record / APPENDICES la APPENDIX A UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 87-5376 ROBERT F. DEFORD, on behalf of himself and all employ- ees of Soo Line Railroad Company affected by the dis- position of Lake States Transportation Division and RAILWAY LABOR EXECUTIVES’ ASSOCIATION, on behalf of itself and represented employees, Appellants, v. Soo LINE RAILROAD COMPANY, a Minnesota Corporation, Soo LINE CORPORATION, a Minnesota corporation, DENNIS M. CAVANAUGH, Wisconsin Central Ltd., an Illinois corporation, EDWARD A. BURKHARDT, THOMAS POWER, ROBERT H. WHEELER, JOHN DOE and RICHARD B. OGLIVIE, Appellees. Appeal from the United States District Court for the District of Minnesota Submitted: May 12, 1988 Filed: February 9, 1989 ——_. Before LAY, Chief Judge, HENLEY, Senior Circuit Judge, and JOHN R. GIBSON, Circuit Judge. 2a JOHN R. GIBSON, Circuit Judge. This appeal is brought by Robert F. Deford, on behalf of himself and all other employees of the Soo Line Rail- road Company adversely affected by the sale of a portion of Soo Line’s rail lines, and by the Railway Labor Execu- tives’ Association (RLEA).' The district court? denied a motion to remand the case to state court and dismissed appellants’ complaint under Fed. R. Civ. P. 12(b) (1) for lack of subject matter jurisdiction. The district court, in statements from the bench, determined that the case Was a “minor dispute” under the Railway Labor Act (RLA), 45 U.S.C. $$ 151-188 (1982), and that the RLA completely preempted Deford’s state law claims of fraud, conspiracy, and tortious interference with credi- tor’s rights, and required arbitration rather than court adjudication. We affirm the district court’s judgment denying remand to state court and dismissing the com- plaint, and conclude that the district court properly analyzed the preemptive effects of the RLA. We further hold that under the circumstances of this case the Inter- state Commerce Act (ICA), 49 U.S.C. $$ 10101-11917 (1982); is also an appropriate basis to preempt the state law claims. ; i On April 2, 1987, Soo Line, a class I railroad with approximately 7,750 miles of rail lines in twelve states, agreed to sell a portion of its rail lines (1,960 miles) known as the Lake States Division to Wisconsin Central Ltd. Wisconsin Central, a recently formed Illinois cor- poration, was not a carrier prior to the transaction. but 1RLEA is a voluntary, unincorporated association of the chief executive offices [sic] of the standard national and international railway unions in the United States. RLEA brings this action on behalf of its constituent members and their unions. * The Honorable James M. Rosenbaum, United States District Judge for the District of Minnesota. 3a became a completely independent railroad upon the sale of the Lake States Division. The structure of the sale was a leveraged buyout, where Wisconsin Central. having little equity in the investment, financed a substantial portion of the purchase price. Wisconsin Central’s lender then took first lien on all the assets of the Lake States Division. Sales such as these are governed by the Interstate Commerce Act (ICA}, which provides for Interstate Commerce Commission (ICC) regulation of railroad ac- quisitions. To comply with the ICA, Wisconsin Central was required to either obtain ICC approval of the sale or receive an exemption from the ICC approval proce- duves. Wisconsin Central filed a notice of exemption with the ICC on September 4, 1987. The ICC stayed the effectiveness of the notice of exemption through Octo- ber 27, 1987 to investigate the acquisition and invited comments by interested parties. After evaluating com- ments by several labor organizations, including the RLEA, the ICC lifted the stay but continued to review the transaction. The sale became effective three days later. The RLEA then filed a petition to revoke the exemption, which the ICC denied on July 8, 1988. Deford and RLEA brought this action in Minnesota state court on June 12, 1987, asserting claims under Minnesota common law and the Minnesota Uniform Fraudulent Transfer Act, Minn. Stat. Ann. &§ 513.4)- 51.° Deford first alleged that the sale of the Lake States * Deford and RLEA framed their complaint around Minn. Stat. §$ 513.20-513.32. This statute, however, was repealed but rein- stated in 1987 with minor changes. Because the changes are not relevant here, we base our analysis on the new statute. The statute provices in part: 513.44 Transfers fraudulent as to present and future creditors (a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was 4a Division to Wisconsin Central was an attempt to de- fraud Soo Line employees and the RLEA of their rights and benefits as creditors, in the form of accrued but un- paid wages, vacation pay, labor protection pay, insurance premiums, and pension contributions. Deford further al- leged that the transfer of proceeds from the sale was not for fair consideration, leaving Soo Line with an unrea- sonably small amount of capital for future operations. Further, Deford stated that the sale proceeds will be disbursed to shareholders and other creditors of Soo Line, not to Soo Line employees. Thus, the position of the plaintiffs as creditors of an undercapitalized post-sale entity would be severely impaired. Deford also alleged that the leveraged sale of Lake States Division is a fraudulent conveyance as to those Soo Line employees who will quit and join Wisconsin Central, because Wis- incurred, if the debtor made the transfer or incurred the obligation: (1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or (2) without receiving a reasonably equivalent value in ex- change for the transfer or obligation, and the debtor: (i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or trans- action; or (ii) intended to incur, or believed or reasonably should have believed that he vr she would incur, debts beyond his or her ability to pay as they became due. % * * 513.45. Transfers fraudulent as to present creditors (a) A transfer made or cbligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a resuit of the transfer or obliga- tion. a va consin Central’s secured lenders will have superior claims to Lake States assets. Finally, Deford alleged common law claims of conspiracy to frustrate creditors’ rights and tortious interference with creditors’ rights, arguing that the purpose and effect of the transaction was to cir- cumvent Soo Line’s labor agreement obligations to its employees and union creditors. Deford sougiit a declaration that the sale of the Lakes [sic] States Division, the distribution of proceeds from the sale, and the creation of any security interests on the assets of the Lake States Division constituted a fraudu- lent conveyance. Deford further sought an order that the proceeds from the sale not be disbursed or pledged until the rights of the plaintiffs are adequately provided for, and that a receiver be appointed so that the sale proceeds may be placed in trust for the benefit of Soo Line employees and creditors. Thereafter, the suit was removed to the United States District Court of Minnesota on the grounds that federal law preempted the state claims. Upon Deford’s motion to remand and Soo Line’s motion to dismiss, the district court concluded: plaintiffs have asserted rights arising under certain collective bargaining agreements and their contrac- tual arrangements with the Defendant. * * * [T]hese claims are governed by the Railway Labor Act. * * * The application of this statute and the necessity of its interpretation establish the exist- ence of a federal question as an essential element of the plaintiff’s cause of action providing the basis for removal. Deford v. Soo Line R.R. Co., No. “4-87-582, (D. Minn. August 20, 1987). The district court further stated that Deford could not avoid removal by failing to plead nec- essary federal questions and that artful pleading by the plaintiffs would not conceal the true nature of the com- 6a plaint. Finally, the district court held that the case in- volved a “minor dispute’ which must be arbitrated ac- cording to the procedures of the RLA, which provides that the exclusive forum for a union dispute is the Na- tional Railway Arbitration [sic] Board (NRAB). The district court concluded that since the state court lacked subject matter jurisdiction, the district court acquired none upon removal. The suit was therefore dismissed for lack of subject matter jurisdiction. Deford now appeals, alleging error in the removal of the case to federal court and the subsequent dismissal of the case. Il. The nature of the claims asserted by Deford have in es- sence two purposes. The first is to protect the rights and benefits of employees and the second is to raise questions about the financial soundness of the conveyance of the rail line from Soo Line to Wisconsin Central. These pur- poses in turn involve consideration of the protections af- forded the employees by the Railway Labor Act, and the regulatory structures involved in approval of the transfer under the Interstate Commerce Act. The primary issue before us is whether removal of Deford’s state fraudulent conveyance and common law claims to federal court was proper, giving the district court power to dismiss for lack of subject matter juris- diction. To determine this, we must decide whether the Railway Labor Act, the Interstate Commerce Act, or both completely preempt the state law claims. Only if there is complete preemption is removal justified, and it follows that such preemption then dictates dismissal. To remove a case to federal court under 28 U.S.C. 1441, the claim must “aris[e] under’ federal law. Ordi- narily, a “right created by federal law must be an essen- tial element of plaintiff’s cause of action,” and the essence of the federal claim must appear on the face of the com- plaint. Evans v. Missouri Pac. R.R. Co., 795 F.2d 57, Ta 58 (8th Cir. 1986), cert. denied, U.S. , 107 S. Ct. 1886 (1987). Thus, a defense of federal law, in- cluding the defense of federal preemption, is traditionally not a basis for removal. Franchise Tax Board v. Con- struction Laborers Vacation Trust, 463 U.S. 1, 4 (1983). The Supreme Court. however, has fashioned a signifi- cant exception to the general rule known as the “com- plete preemption doctrine.” This rule states that when- the preemptive force of a federal statute is “extraordi- nary,” it “converts an ordinary state common law com- plaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Caterpillar, Inc. v. Williams, US. , 107 S. Ct. 2425, 24380 (1987). This exception prohibits a plaintiff from defeating re- moval by failing to plead necessary federal questions in a complaint and allows a defense of federal preemption as a basis for removal. The Supreme Court has specifically recognized the com- plete preemption doctrine in two distinct areas. In Avco Corp. v. Aero Lodge No. 735, Int'l Ass’n of Machinists & Aerospace Workers, 390 U.S. 557 (1968), the Supreme Court held that section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, displaced any otherwise applicable state law, even though the suit was brought in a state court. Avco involved an employer who, relying on state law, brought suit in a state court to enjoin a union from violating a collective bargaining agreement by striking. The court stated that when a section 301 action is brought, “|s]tate law * * * will be absorbed as federal law and will not be an independent course of private rights.” Jd. at 560 (citing Tevtile Workers v. Lincoln Mills, 353 U.S. 448 (1957)). Thus, the claim was one arising under the laws of the United States within the meaning of the removal statute. 28 U.S.C. § 1441 (b). The Supreme Court extended the complete preemption doctrine in Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 8a 58, 107 S. Ct. 1542 (1987), permitting removal based on claims arising under section 502(a) of the Employee Re- tirement Income Security Act (ERISA), which provides for exclusive federal resolution of employee benefit dis- putes involving a covered plan. The court stated that the remedies of the federal “scheme would be completely undermined if ERISA plan participants and beneficiaries were free to obtain remedies under state law that Con- gress rejected in ERISA.” 107 S. Ct. at 1547 (citing Franchise Tax Board, 463 U.S. at 25-26) ). Deford maintains that the complete preemption doc- trine applies only to section 502(a) of ERISA and sec- tion 301 of LMRA and that the district court erred in finding that complete preemption applies to the RLA as well. We recognize the Supreme Court has expressed re- luctance to find this extraordinary preemptive power. I[d. We are satisfied, however, that the reason underlying Caterpillar, Avco, and Metropolitan do not limit the doc- trine to only the two statutes recognized by the Supreme Court. We believe that the fundamental question is whether the RLA or the ICA so pervasively occupy the field of railroad governance that a competing state law claim necessarily invokes federal law. IIT. In analyzing the statutory scheme of the RLA, we conclude that it “pervasively occupies” the field of rail- road labor disputes, completely preempting state law claims arising out of collective bargaining agreements. The Railway Labor Act was enacted by Congress to pro- mote stability in labor-management relations in the rail- road industry. Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89, 94 (1978). To effectuate this purpose the RLA pro- vides for mandatory administrative grievance procedures and remedies for “minor disputes” arising from the em- ployment relationship between a railroad employee and 9a the carrier.* A minor dispute is one involving the inter- pretation or application of an existing collective bargain- ing agreement. The RLA grants to the NRAB exclusive power to resolve all minor “disputes between an employee or group of employees and a carrier * * * growing out of grievances or out of the interpretation or application of agreements concerning rates of pay, rules, or working conditions * * *.” 45 U.S.C. § 153(i). NRAB decisions in disputes arising out of collective bargaining agree- ments are subject to limited judicial review in the fed- eral courts. Once the administrative remedy with the NRAB has been exhausted, the party may not relitigate the issue in an independent judicial proceeding. Andrews v. Louisville & Nashville R.R. Co., 406 U.S. 320, 325 (1972). In compliance with the RLA requirements, federal courts have routinely dismissed a wide variety of state law claims, holding that statutory grievance procedures under the RLA are the mandatory and exclusive federal remedy for resolving minor disputes. “In enacting this legislation * * * Congress considered it essential to keep these so-called ‘minor disputes’ within the National Rail- road Adjustment Board and out of the courts.” Union Pacific R. R. v. Sheehan, 439 U.S. 89, 99 (1978) (em- phasis added). See also Andrews, 406 U.S. at 325; Brotherhood of Locomotive Eng’rs v. Louisville & Nash- ville R.R. Co., 373 U.S. 38, 38 (1963) ; Landfried v. Ter- 4“The terms ‘major’ and ‘minor’ are not contained in the RLA, but were articulated by the United States Supreme Court to dif- ferentiate two types of disputes described in the Act which have distinct avenues of relief.” Brotherhood of Locomotive Eng’rs v. Boston & Maine Corp., 788 F.2d 794, 797 n.3 (1st Cir.), cert. denied, —— U.S. ——, 107 S. Ct. 111 (1986) (citing Elgin Joliet & E. Ry. Co. v. Burley, 325 U.S. 711 (1945)). Major disputes relate to the “formation or modification of the collective bargaining agreement,” and thus have no bearing whatsoever on this case. The issue here is whether the minor dispute provisions of the RLA apply to preempt plaintiffs’ state law causes of action. 10a minal R. Assoc., 721 F.2d 254, 255 (8th Cir. 1988), cert. denied, 466 U.S. 928 (1984); Gregory v. Burlington N. R.R. Co., 6388 F. Supp. 538, 540-41 (D. Minn. 1986), aff'd, 822 F.2d 1092 (8th Cir. 1987). There is overwhelming case law to support our decision that the RLA’s preemptive force is so extraordinary that it takes over the whole field of railroad labor disputes arising from collective bargaining agreements. In An- drews, 406 U.S. at 321, the Supreme Court accepted the RLA as an appropriate jurisdictional basis for removing a case from state to federal court. Similarly, the Ninth Circuit in Schroeder v. Trans World Airlines, Inc., 702 F.2d 189, 192 (9th Cir. 1983), held that a state action against an employer for wrongful demotion was remov- able to federal court because the nature of plaintiff’s com- plaint was actually a grievance or dispute under the RLA. See also Beers v. Southern Pac. Transp. Co., 703 F.2d 425, 427 (9th Cir. 1983) ; McKinney v. Int’l Ass’n of Machin- ists & Aerospace Workers, 624 F.2d 745, 747 (6th Cir. 1980). The Seventh Circuit has even equated the RLA with the LMRA to find complete preemptive powers in the RLA. See, e.g., Leu v. Norfolk & W. Ry. Co., 820 F.2d 825, 830 (7th Cir. 1987); Graf v. Elgin, Joilet & E. Ry. Co., 790 F.2d 1341, 1346 (7th Cir. 1986). Be- cause section 153 of the RLA has essentially the same function as section 301 of the LMRA, which also involves settling collective bargaining disputes, these courts con- cluded that the Supreme Court’s section 301 analysis in Avco, recognizing complete preemption of state law claims, should also apply to the RLA. The Third Circuit, however, has recently addressed this issue and reached the opposite result. See Railway Labor Executives Ass’n v. Pittsburgh & Lake Erie R.R. Co., 858 F.2d 936 (3d Cir. 1988) (hereafter P&LE). In P&LE the RLEA asserted a fraudulent conveyance action against a railroad under a Pennsylvania statute similar to the Minnesota statute at issue here. The court held that the case was wrongfully removed to federal court lla because the complete preemption doctrine does not apply to collective bargaining disputes arising under the RLA. The P&LE court emphasized that because there is no af- firmative indication of a congressional intention on the face of the statute to permit removal, the RLA cannot completely preempt state claims. In finding no congres- sional intent, the court particularly stressed the absence of a civil enforcement provision within the RLA under which the plaintiff could assert his fraudulent convey- ance action. Because the plaintiff’s state claim could not be recharacterized as a comparable claim arising under the RLA, no removal was permitted. We believe that while the approach of the P&LE court sheds some light on whether a federal statute “perva- sively occupies” a field of law, it is unnecessarily narrow. Not only must we look to affirmative congressional intent and civil enforcement provisions, but we must also look to such factors as the history amd purpose of the statute. Recent case Jaw illustrating the federal nature of the stat- ute and analogous statutes with complete preemptive powers are also informative. Having analyzed the RLA under this light, we conclude that it was Congress’ intent that the RLA govern all railway labor disputes such as those in this case arising from collective bargaining agreements. Having decided that the complete preemption doctrine applies to collective bargaining disputes under the RLA, we must now decide whether Deford’s Minnesota statu- tory and common law claims require interpretation of the collective bargaining agreement. Deford maintains on appeal that the common law and fraudulent conveyance claims alleged in his complaint do not fall within the definition of a “minor dispute” requiring the interpreta- tion of a colective bargaining agreement. To determine if a claim is a minor dispute the key inquiry is “whether evaluation of the * * * claim is inextricably intertwined with consideration of the terms of the labor contract. 12a If the state * * * law purports to define the meaning of the contract relationship, the law is preempted.” Leu, 820 F.2d at 830 (citing Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985) ). Deford attempts to avoid RLA preemption by assert- ing that this action is not brought under any labor con- tract or protective agreement. The existence and extent of the creditor’s rights asserted by Deford and _ the RLEA, however, can be determined only by interpreting the collective bargaining agreements. Even on the face of the complaint Deford predicates his claims upon en- titlements to accrued but unpaid wages, vacation pay, life and health insurance, pension contributions, and sev- erance benefits arising “pursuant to continuing labor contracts and employee protection agreements.” Simi- larly, RLEA alleges entitlements “pursuant to the vari- ous collective bargaining agreements.” In fact, all of plaintiffs’ allegations regarding “creditors’ rights” and “creditor obligations” are based entirely upon supposed rights to unspecified and unquantified ‘“‘wages, benefits and labor protection” pursuant to the labor agreements. Deford and RLEA further assert as a basis for relief that “[e]mployees who quit would waive their rights under the Labor Agreements.” Indeed, a theme that runs throughout the complaint is the defendants’ al- leged “circumvention of the burden of the Labor Agree- ments for Lake States’ employees” through the sale. Moreover, RLEA has sued Soo Line and Wisconsin Central in a separate action in federal district court in Chicago specifically alleging that the transaction here affects the rates of pay, rules and working conditions under various collective bargaining agreements between Soo Line and the unions. In its complaint, the RLEA sought to require compliance with the RLA and to arbi- trate under the labor conditions set forth in New York Dock Ry.—Control—Brooklyn E.D. Terminal, 360 1.C.D. [sic] 60 (1979), which are imposed by the ICC. See Com- 12a plaint, Counts III and IV and prayers for relief in Rail- way Labor Exec. Ass’n v. Soo Line R.R. Co., Civ. No. 87 C 52293 (N.D. Il. filed July 13, 1987). We may take judicial notice of the pleadings filed in this proceeding. Fed. R. Evid. 201. RLEA ignores these allegations here when it maintains that no terms of collective bargaining agreements are at issue. Deford further tries to avoid removal by arguing that the Minnesota fraudulent transfers act “imposes duties and obligations on all creditors completely independent of any collective bargaining agreement.” This statement, however, mischaracterizes the nature of the fraudulent conveyance statute. The Minnesota Uniform Fraudulent Transfer Act is not substantive in nature, but instead merely confers an alternate remedy for protecting pre- existing creditor rights. The creditor rights a party seeks co enforce must exist under independent law, such as contract law. See Brill v. W. B. Foshay Co., 65 F.2d 420, 423 (8th Cir.), cert. denied, 290 U.S. 643 (1933) (interpreting the Minnesota Fraudulent Transfer Act). The purpose of the statute is to grant creditors addi- tional enforcement possibilities when a debtor transfers. his assets to a third party. In this case the creditors rights asserted are based upon the terms of the collective bargaining agreements and the Minnesota statute only provides an additional method for enforcing the terms of the agreements. We therefore affirm the district court’s finding that Deford’s claims directly involve the collec- tive bargaining avreements and constitute “minor dis- putes” under the RLA. Deford bases his argument against preemption on Evans v. Missouri Pac. R.R. Co., 795 F.2d 57, 58 (8th Cir. 1986), where we held that the federal preemption defense in response to a state law claim is not a ground for removal. Deford’s reliance on Evans is misplaced. At ‘dispute in Evans was whether a complaint alleging slander and damages pursuant to the Federal Employer’s 14a Liability Act was a “minor dispute” arising under the RLA. The Evans court found that the complaint pre- sented no question which would require interpretation of a collective bargaining agreement for their resolution and was therefore not a minor dispute. Jd. The holding of Evans in no way excludes the RLA from the complete preemption doctrine. Deford finally relies on several other Supreme Court cases to support his argument against removal of his claims under the RLA. These cases, however, can be distinguished from the present facts. In Sears, Roebuck & Co. v. San Diego County District Council of Carpen- ters, 436 U.S. 180, 198 (1978), a suit seeking an injunc- tion against a union’s peaceful picketing on the ground that the picketing violated state trespass law was not preempted by the NLRA. The Supreme Court specifically determined, however, that the state trespass claim was completely unrelated to a collective bargaining agree- ment. In Lingle v. Norge Div. of Magic Chef, Inc., USS. , 108 S. Ct. 1877, 1878 (1988), the Court held that section 301 of the LMRA did not completely pre- empt a state retaliatory discharge claim. The Court stated that a retaliatory discharge claim is a substantive state claim, “which addresses purely factual questions pertain- ing to the conduct of the employee and the conduct and motivation of the employer.” Jd. at 1881. Neither of these elements require a court to interpret the terms of a collective bargaining agreement. Thus, preemption was not warranted. The creditors rights asserted by Deford, by contrast, directly involve the interpretation of collec- tive bargaining agreements. Finally, in Farmer v. United Brotherhood of Carpenters and Joiners of Amer- ica, 480 U.S. 290 (1977), the Supreme Court held that the NLRA did not preempt a state tort action for inten- tional infliction of emotional distress arising in connec- tion with alleged employment discrimination. The Court, however determined that the claim was not preempted be- cause it was based on abusive and outrageous action by 15a the defendant. Jd. at 302. In this case there has been no pleading of conduct in the transaction that reaches the level of abusive or outrageous behavior found in Farmer. We therefore find Deford’s arguments based on these Su- preme Court cases unpersuasive. In conclusion, Deford is essentially claiming that if the sale of rail lines from Soo’ Line to Wisconsin Central is not, in effect, unwound, the transaction will result in a breach of Soo Line’s obligations under the existing col- lective bargaining agreements. Thus, by asserting state law claims, Deford seeks enforcement of the terms of the collective bargaining agreements. The fraudulent con- veyance act serves only as an enforcement mechanism. We believe Deford is only trying to invoke a state law remedy in place of the mandatory and exclusive reme- dies of the Railway Labor Act, and we therefore affirm the district court’s removal of the suit to federal court and its subsequent dismissal of the case. IV. Additionally, we believe that the Interstate Commerce Act, 49 U.S.C. $$ 10101-11917 (1982), so pervasively occupies the field of railroad governance that it com- pletely preempts Deford’s state law claims. As stated in the previous RLA analysis, we must focus on the nature and purpose of the ICA, illustrated by the language of the statute and recent case law, to determine if the com- plete preemption doctrine applies to the ICA. The ICA’s primary purposes are to ensure fair shipping rates, safety, fair wages and working conditions, and efficiency in transportation, and to discourage monopolistic prac- tices and labor strikes. See 49 U.S.C. §§ 10101, 10101a. To promote these goals, the ICA generally requires that before a railroad acquires or abandons a railway line, the rail carriers involved must obtain approval by the ICC, which may include the imposition of labor protec- tive agreements on the railroad. 49 U.S.C. § 10901. Pur- 152 i suant to section 10505, however, the ICC may exempt any transaction from regulation under section 10901 when it finds that regulation “is not necessary to carry out” national rail transportation policy, and is “not needed to protect shippers from the abuse of market power.” 49 U.S.C. §10505(a). In 1985, the ICC ex- empted the entire class of transactions involving acquisi- tion by “new carriers from the detailed approval proce- dures under section 10901.”° See 49 U.S.C. § 10505; Ex Parte No. 392, (Sub No. 1), Class Exemption for the Acquisition and Operation of Rail Lines under 29 [sic] U.S.C. § 10901, 1 1.€.2d [sic] 810 (1986), review denied sub nom. Lilinois Commerce Comm’n v. ICC, 817 F.2d 145 (D.C. Cir. 1987) (Ex Parte No. 392). Obviously labor protective agreements cannot be imposed when the trans- action is exempt. The class exemption becomes effective and the transaction is deemed approved seven days after the acquiring entity files a verified notice with the ICC, unless the ICC stays the transaction. Here Wisconsin Central filed a notice of exemption which was stayed by the ICC. After evaluating com- ments by the RLEA and other interested parties, the ICC lifted the stay, but continued to review the transaction. After bringing this action in federal court, the RLEA filed a petition to revoke the exemption and impose labor protective conditions, which the ICC denied. The broad grant of power given the ICC in governing railway transactions is illustrated on the-face of the ICA. The exclusivity of the ICC’s authority is expressly set out in section 10501(d) which states: ‘The jurisdiction of the Commission ... over transportation by rail car- riers, and the remedies provided in this title with respect to the rates, classifications, rules and practice of such carriers, is exclusive.” In sections 1144, 1145, and 1166, Congress granted to the ICC the power to require ex- 5A “new carrier” is a newly formed railroad not already sub- ject to the ICA. tensive informational reports from rail carriers, includ- ing detailed financial data. The ICC in turn promul- gated detailed regulations directing .ailroads to submit comprehensive financial and other operating data. 49 C.F.R. Part 1201. In determining whether to approve a transaction, the ICC is directed to consider both the fi- nancial aspects of the sale of rail lines to the non-carrier and the impact of the sale upon all employees involved. See 49 U.S.C. $$ 10901'a!, (e). Furthermore, the ICC has discretion to condition its approval of a section 10901 transaction on the imposition of labor protective agreements containing a “fair and equitable arrange- ment for the protection of the interests of railroad em- plovees adversely affected by the transaction.” 49 U.S.C. $10901(e). Thus, the ICC has obtained extensive infor- mation concerning the sale of Lake States Division and is uniquely qualified to evaluate the claims that Deford and the RLEA have brought before it. To allow Deford to now bring a state law action would be to disregard the ICC’s authority and expertise in this matter. Our decision is supported by the Supreme Court in Chicago N. W. Transp. Co, v. Kalo Brick & Title [sic] Co., 450 U.S. 311 (1981). In Kalo Brick, the Court con- sidered the extent of preemption of state law under former section 1/18) of the ICA, the predecessor of section 10901, in the context of a railroad abandonment. The plaintiff in Kalo Brick sought to collect damages in connection with the resulting loss of railroad services. In finding that the [CA preempted the state law claims, the Court reasoned that when Congress has chosen to legis- late pursuant to its constitutional powers, a court must find state law preempted by federal regulation when the state statute “stands as an obstacle to the accomplish- ment and execution of the full purposes and objectives of Congress.” /d. at 317 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). The Court further stated that the ICA “is among the most pervasive and comprehensive of federal regulatory schemes” and that ‘compliance with 18a the intent of Congress cannot be avoided by mere artful pleading” of state law claims “to gain * * * the re- lief * * * denied by the Commission.” Jd. at 318, 324. Also, the Court emphasized the exclusive nature of the ICC’s jurisdiction and stated that “[t]he breadth of the Commission’s statutory discretion suggests a congressional intent to limit judicial interferences with the agency’s work.” Id. at 321. Thus, it would be contrary to both the letter and the spirit of Kalo Brick to allow Deford and the RLEA to avoid the ICC’s approval of the transaction pursuant to Ex Parte No. 392 by pleading a state law claim. ~ Deford relies on Hayfield N. R.R. Co. v. Chicago & N. W. Transp. Co., 467 U.S. 622 (1984), which denies preemption by the ICA of state law claims. In this case, however, the railroad received ICC approval to abandon railway lines. Thereafter, another railroad initiated state condemnation proceedings. The Supreme Court held that the ICA did not preempt the state condemnation claims because the ICC relinquished jurisdiction upon granting abandonment, and the application of the state statute would not obstruct the accomplishment of the ICA. Jd. at 634-35. Here, on the other hand, Deford and the RLEA seek to regulate, through state law, the same aspects of the same transaction that the ICC is evaluating. In addi- tion, this matter does not involve an abandonment, which puts the subject property outside the scope of ICC regula- tion, but rather an acquisition of rail lines which brings the new carrier, Wisconsin Central, within the ambit of continued regulation under the ICA.®° Consequent!, the ICC provides a forum in which Deford may seek further relief, and reviews complaints or requests for revocation of the class exemption and imposition of labor protective conditions that might be submitted by Deford or the 6 Kalo Brick is distinguished from Hayfield in that it involved a state law claim for damages arising from the ICC’s approval of abandonment. In Hayfield, the suit concerned activities occurring after the ICC had approved the abandonment. — | 19a RLEA. The ICC stated in its order of October 8, 1987 authorizing the class exemption that it would continue to receive comments and to review the effects of the trans- action. In its decision of July 8, 1988, the ICC analyzed the many comments it received, specifically addressing RLEA’s petition to revoke the exemption, and upheld its decision to exempt the sale of Lake States Division.’ The ICC stated, however, that although this was their final decision on the issue, it still had jurisdiction to scrutinize the transaction and subsequently to revoke the exemption and impose labor protective conditions if warranted. Finance Docket No. 31102, Wisconsin Central, Ltd.— Exemption Acquisition and Operation—Certain Lines of Soo Line Railroad Company, p. 12, served July 8, 1988. Furthermore, the ICC has exclusive jurisdiction to ap- prove the issuance of securities, including debt instru- ments, by a carrier. 49 U.S.C. §11301(b)(1). Here RLEA seeks to block Wisconsin Central’s plan to finance its acquisition of the lines with debt instruments. The ICC, however, has exclusive jurisdiction over such an is- suance and any disputes arising from it. Jd. Thus, un- like Hayfield, the ICC will continue to review all com- plaints and to approve the issuance of securities. A state law action would therefore obstruct ICC functions. In essence, we believe that this action is a collateral attack upon the ICC’s decision to exempt the Lakes [sic] States Division sale from regulation. All of the claims brought by Deford and the RLEA in this lawsuit have been previously presented to the ICC for its consideration. When Wisconsin Central, filed with the ICC a notice of exemption under Ex Parte No. 392, the ICC invited com- ments from any interested parties. The RLEA submitted extensive comments opposing approval of the transaction 7The ICC’s July 8, 1988 order limited further discovery and emphasized the restriction that would be placed upon it. It is also of interest that the order referred to the RLEA’s purchase offer for Lake States Division. 20a which focused on the financial aspects of the transaction— the same issues it raises under the guise of state fraudu- lent conveyance law in this lawsuit. In addition to RLEA’s comments, the ICC entertained comments from other par- ties in considering its response to Wisconsin Central's petition for exemption. In its decision of October 8, 1988 the ICC lifted the stay of the exemption and allowed Wis- consin Central to acquire the Soo Line properties, but stated that it would continue to exercise its exclusive pri- mary jurisdiction. After Wisconsin Central consummated the purchase and began operating, the RLEA submitted a petition to revoke the exemption. In the petition, RLEA contended that because of the precarious financial position of Wis- consin Central due to the leveraged buyout, the ICC should exercise its discretion to revoke the exemption and impose employee protective conditions. On July 8, 1988, the ICC issued an order addressing these allegations. After a de- tailed analysis, the ICC concluded that Wisconsin Cen- tral’s financial position was stable and that it would not revoke the exemption nor impose the employee protective conditions. RLEA’s present attack on this transaction is no more than an attempt to annul or set aside the ICC’s decisions with respect to this rail transaction under the exemption procedures. We therefore find it impossible to grant the relief Deford and the RLEA seeks here without impinging on the ICC’s order. We conclude that when such a collateral attack is brought in state court under the guise of state law, the ICA necessarily completely pre- empts the state law claims and the suit is removable to federal court. The Supreme Court reached the same result in Venner v. Michigan Central R.R., 271 U.S. 127 (1926). In Ven- ner, the ICC, upon application by rail carriers, approved an agreement between three railroads to acquire locomo- tives and pay for them by issuing certificates. Plaintiff brought an action in state court to enjoin the issuance of P14 at ae C certificates, which was later removed to federal court on defendant’s motion. The federal court dismissed the ap- peal as a collateral attack on the ICC’s order, holding the appeal to be: essentially one to annul or set aside the order of the [ICC]. While the [complaint] does not expressly pray that the order be annulled or set aside, it does assail the validity of the order and pray that the de- fendant [companies] be enjoined from doing what the order specifically authorizes, which is equivalent to asking that the order be adjudged invalid and set aside. Id. at 130. This language aptly fits the efforts of Deford in this action. See also Railway Labor Exec. Ass’n v. Staten Island R.R., 792 F.2d 7, 12 (2d Cir. 1986), cert. denied, 479 U.S. 1054 (1987) (district court dismissed claim alleging a violation under RLA because it impinged on ICC order under class exemption proceedings). In sum, we believe that the ICA demonstrates Congress’ intent to delegate to the ICC the exclusive responsibility to evaluate all aspects, including financial viability, of rail line transfers. The ICA provides both a forum and a set of remedies that is exclusive and completely preempts competing state law claims. V We have determined that both the RLA and the ICA preempt Deford’s state law claims. In two recent cases, we held that when there is a conflict between the RLA and the ICA, the provisions of the ICA governing labor protection agreements supersede the mandatory bargain- ing requirements of the RLA. Burlington N. R.R. Co. v. United Transp. Union, 848 F.2d 856, 863 (Sth Cir. 1988) : Railway Labor Executives’ Ass’n v. Chicago & N. W. Transp. Co., 848 F.2d 102, 104 (8th Cir. 1988).8 ‘The Supreme Court has recently granted certiorari in Railway Labor Exec. Ass'n v. Pittsburgh & Lake Erie R.R., 845 F.2d 420 22a In this case, however, it is not necessary that we decide which of the two statutes governs to the exclusion of the other. We have found complete preemption from both and removal is justified if there is complete preemption from only one. Once the district court had jurisdiction, the complete preemption which conferred jurisdiction was suf- ficient to authorize dismissal on grounds of preemption. We affirm the judgment of the district court. LAY, Chief Judge, dissenting. I respectfully dissent. Neither the Railway Labor Act (RLA) nor the Interstate Commerce Act (ICA) justifies removal under the “complete preemption doctrine.” The doctrine is a narrow one. It allows removal when the pre- emptive force of a statute is so “extraordinary” that it completely displaces an area of state law. The Supreme Court has been careful to limit the situa- tions in which removal is appropriate. The Court has ap- plied the doctrine in cases involving section 301 of the LMRA, 29 U.S.C. §185(a), and section 502(a) of ERISA, 29 U.S.C. § 1144. In Metropolitan Life Ins. Co. v. Taylor, USS. , 107 S. Ct. 1542, 1548 (1987), the Court examined the intent of Congress to determine whether section 502(a) of ERISA permitted removal. Justice Brennan, joined by Justice Marshall, concurred in the unanimous opinion of the Court, but wrote separately to emphasize the narrowness of the complete preemption doctrine: [OJur decision should not be interpreted as adopting a broad rule that any defense premised on congres- sional] intent to preempt state law is sufficient to es- tablish removal justification. The Court holds only that removal jurisdiction exists when, as here, ‘Con- (3d Cir. 1988), which involves issues of preemption between the ICA and RLA. 23a gress has clearly manifested an intent to make causes of action... removable to federal court.” (em- phasis added). In future cases involving other stat- utes, the prudent course for a federal court that does not find a clear congressional intent to create re- moval jurisdiction will be to remand the case to state court. Id. at 1548 (Brennan, J., concurring) (citation omitted) (emphasis in original). No interpretation of the collective bargaining agree- ment is required here; therefore the RLA does not pre- empt state law. I would further hold under the circum- stances presented here the ICA does not contain such extraordinary preemptive force as to invoke the complete preemption doctrine. The Railway Labor Act The majority finds that the employees’ state law claims exist only to the extent that the collective bargaining agreement with the railroad creates entitlement to pay- ment. The majority also finds that the interpretation of the collective bargaining agreement must be submitted to arbitration as a minor dispute under the RLA. The ma- jority thus concludes that removal was proper under the RLA and that there exists no jurisdiction over minor dis- putes. The Supreme Court recently addressed the error of these conclusions in Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. , 108 S. Ct. 1877 (1988). In Lingle, the Court held “that an application of state law is pre-empted by § 301 of the Labor Management Relations Act of 1947 only if such application requires the interpretation of a collective-bargaining agreement.” Id. at 1885 (footnote omitted) (my emphasis). The Court then described when “interpretation” is required: A collective-bargaining agreement may, of course, contain information such as rate of pay and other 24a economic benefits that might be helpful in determin- ing the damages to which a worker prevailing in a state law suit is entitled. Although federal law would govern the interpretation of the agreement to deter- mine the proper damages, the underlying state law claim, not otherwise pre-empted, would stand. Thus, as a general proposition, a state law claim may de- pend for its resolution upon both the interpretation of a collective-bargaining agreement and a separate state law analysis that does not turn on the agree- ment. In such a case, federal law would govern the interpretation of the agreement, but the separate state law analysis would not be thereby pre-empted. Id. at 1885 n.12 (citation omitted). The Court recognized the state law claim even though plaintiff would have to rely upon federal_law for the determination of a damage award. The Court did not find that the state law claims were preempted by section 301 of the NLRA, let alone the complete preemption necessary for removal jurisdiction. Here, plaintiffs assert claims under Minnesota common law and the Minnesota Uniform Fraudulent Transfer Act, Minn. Stat. Ann. $$ 513.41-51. As in Lingle, plaintiffs base their claims on definitive state law. The majority finds that the Minnesota statute is not substantive, but that it seeks to enforce pre-existing creditor’s rights which “exist under independent law, such as contract law.” Supra at 13. Interpretation of the col- lective bargaining agreement is required only to deter- mine standing as a creditor, and to determine the amount of damages. The state statute creates an entitlement independent of the collective bargaining agreement, and is not preempted by the RLA. Interstate Commerce Act The Interstate Commerce Act is not as pervasive in scope as either section 301 of the LMRA or section 5021 a) ob lp at 25a of ERISA. Therefore, the ICA does not completely pre- empt state law. The general jurisdictional section of the ICA is contained in 49 U.S.C. § 10501. This section grants the Interstate Commerce Commission (ICC) jurisdiction over the “transportation” of people and property, and over related services. 49 U.S.C. § 10102(26). However, these sections do not confer jurisdiction over the sale of existing rail lines. Other sections of the ICA contain more specific grants of jurisdiction.' However, none of these sections is as pervasive in scope as are the two recognized areas of complete preemption set forth in Taylor and Lingle. The very structure and specificity of these sections tend to deny that the whole field of transportation has been extraordinarily preempted so as to justify removal jurisdiction. In Hayfield N.R.R. v. Chicago & N.W. Transp. Co., 467 -U.S. 622 (184), the Supreme Court considered whether federal regulation of abandonment of rail lines was so pervasive as to preclude state action. Jd. at 632-34. The Court stated: The first contention attempts to bring this case within the narrow ambit of decisions in which this Court has indicated that congressional legislation so occupied the field of a particular subject area that state regulation within that field would be improper no matter how well state law comported with the federal policies involved. This Court has repeatedly affirmed, however, that “federal regulation of a field of commerce should not be deemed preemptive of state 1 For example, 49 U.S.C. $$ 10901 (authorizing construction and operation of railroad lines), 10902 (authorizing action to provide adequate, efficient and safe facilities), 10903 (authorizing abandon- ment and discontinuance of railroad lines and rail transportation), 11301 (authority of certain carriers to issue securities and assume obligations and liabilities) and 11501 (ICC authority over inter- state transportation) are such provisions. Ce 26a regulatory power in the absence of persuasive reasons —either that the nature of the regulated subject matter permits no other conclusion, or that the Con- gress has unmistakably so ordained.” Id. at 632 (citations omitted). The Court considered four factors in finding no preemption. First, the Court found Congress had not “unmistakably ordained” that states may not exercise traditional power of eminent domain over railroad property. Second, nothing in the Act referred to federal preemption of disposition of abandoned lines. Third, there was no indication that the subject matter permitted “no other conclusion” than that it was governed by federal, not state regulation. Finally, state law tra- ditionally “governs the condemnation of ordinary real property.” Jd. at 632. The Court also found that con- demnation did not obstruct the objectives of section 10905. Td. at 634-36. This case is analogous to Hayfield. In Hayfield, the Court focused on section 10905 instead of the general jurisdictional statute, section 10501. This supports the contention that not all railroad transactions are pre- empted by federal law. The jurisdictional section at issue in our case, section 10901 (jurisdiction for construction and operation and exemptions for certain sales under Ex Parte No. 392, 1 I.C.C. 2d 810 (Dee. 19, 1985)) is nearly identical to section 10905. Section 10901(c) (1) is identical to section 10905(c) except that it expresses what the ICC “may” do instead of what it “shall” do. The use of the word “may” tends to make section 10901 weaker than section 10905. Finally, conveyances of real property and restrictions on corporate transactions are generally matters of state concern. In Hayfield, not only did the Supreme Court fail to hold the field to be so com- pletely preempted as to create removal jurisdiction, but it did not even find state law eminent domain preempted by the federal abandonment provisions. 27a The majority relies primarily on Chicago & N.W. Transp Co. v. Kalo Brick & Tile Co., 450 U.S. 311 (1981). The Supreme Court held that the ICA “precludes a ship- per from pressing a state-court action for damages against a regulated carrier when the [ICC], in approving the carrier’s application for abandonment, reaches the merits of the matters the shipper seeks to raise in state court.” Id. at 331-32. However, this case is distinguishable from the facts here because the ICC did not in fact reach the merits of the fraudulent conveyance claims. Although the ICC claims it has continuing jurisdiction to evaluate the exemption granted by it to permit the sale, the ICC is not required to examine the merits of plaintiffs’ claims, and had not done so. See 49 U.S.C. $ 10901, Ex Parte No. 392, 1 1.C.C. 2d 810 (Dec. 19, 1985). - In announcing its grant of class exemption permitting sale without compliance with the more rigorous require- ments of section 10901, the ICC stated: Finally, it should be noted that the use of the ex- emption process for approval of a transaction of this scope has raised some concern. We continue to be- lieve that the policy underlying the exemption pro- cedure established in Ex Parte No. 392 (Sub-No. 1) for the sales of lines to non-railroads remains valid and on the whole has been extremely beneficial to the shipping public. Nevertheless, it is true that the larger transactions, however one might define them, present issues which are at least somewhat less ap- propriately dealt with by the exemption process. More interests are more greatly affected, and the efficacy and fairness of revoking the exemption in a later proceeding becomes more questionable. Those diffi- culties are clearly raised with this transaction. Wisconsin Central Ltd., Finance Docket No. 31102, Slip. op. at 3 (ICC Oct. 7, 1987). This indicates that the ICC has not reached the merits of plaintiffs’ claims and that it still had some apprehension over its grant of a class exemption. I would hold that any preemptive force of either the RLA or the ICA is not of the magnitude necessary to completely preempt state law so as to create removal jurisdiction. I would reverse the district court’s decision and remand with orders that the case be remanded to state court. A true copy. Attest: Clerk, U.S. Court of Appeals, Eighth Circuit 204 ed APPENDIX B UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA FOURTH DIVISION Civil Case No. 4-87-582 ROBERT F.. DEFORD, et al., Plaintiff, -VS- S00 LINE RAILROAD Co., et al., Defendant. TRANSCRIPT OF MOTION PROCEEDINGS HAD BEFORE THE HONORABLE JAMES M. ROSENBAUM MINNEAPOLIS, MINNESOTA August 20, 1987 APPEARANCES: Timothy D. Kelly and John Clarke for Plaintiffs Patrick J. McPartland for Defendant Soo Line and Cavanaugh Thomas P. Kane and David Seykora for the remaining Defendants Also Present: Richard J. Flynn and Terence M. Hynes * * * * A 80a [61] THE COURT: Plaintiff’s motion to remand [62] this action is denied. Defendant’s motion to dismiss is granted. The Plaintiff’s assert the Federal Court is with- out removal jurisdiction and the Defendant’s assert re- moval to be proper, and dismissal is then appropriate because the Federal Court lacks subject matter jurisdic- tion. The civil claim in which the United States District Court has original jurisdiction is brought in State Court. It of course may be remove [sic] by the Defendant to the United States district Court, 28 United States Code, Session [sic] 1441. This case was removed by Defendant from the Henne- pin County Court to this Court. The propriety of that removal turns on whether this case falls within the original federal question jurisdiction of this Court and the Court concludes that it does. A Defendant may remove a case to Federal Court if the Plaintiff’s complaint establishes that the case arises under federal law. A right or immunity created by the Constitution of the United States must be an element and an essential one, of Plaintiff’s cause of action. Cite Franchise Tax Board versus Construction Laborers Va- cation Trust, 103 Supreme Court 2841 at 2847, 1983. The requirement that the Court’s federal question juris- diction appear on the face of the Plaintiff’s [63] com- plaint has been characterized as the well-pleaded complaint rule. In this case the Plaintiff's complaint alleges the De- fendant’s actions Constitution [sic] a violation of the Min- nesota Fraudulent Conveyance Act, Minnesota Statute Session [sic] 513, as well as present Minnesota common law claims; conspiracy to frustrate creditor’s rights and a tortious interference with creditor’s rights. The Defend- ants respond that Plaintiff’s cause of action is really one of Federal Law because the complaint presents questions which eequive interpretation of the Railway labor Act for 3la their resolution. Defendants assert the Railway Labor Act as well as the Interstate Commerce Act preempt Plaintiff’s alleged state cause of action. The argument has obviously much focused on the In- terstate Commerce Act and it’s preemptive aspect, that is because the parties appear to have tactitly agreed that this dispute goes to the validity of and the viability of the sale cf a portion of the Soo Line to Wisconsin Cen- tral, Limited. That may well be the prime dispute but the Minnesota cause of action and that before this Court concerns rights arising under the present existing Labor Act and the Plaintiff’s perception that it’s rights are in jeopardy. This focus [64] lends the Court to conclude that the Railway Labor Act provides a proper analytic mode. Under the well-pleaded complaint rule the Plaintiff is generally considered master of his own complaint and is free to dictate the forum in which to bring his action. This principle is not, however, without limitation. And I would cite AVCO Corporation versus Aero Lodge 735, 390 U.S. 557, and 88 Supreme Court 1235, 1968. Plaintiff may not defeat removal by omitting to plead necessary federal questions, citing Franchise Tax Board at 2853. Artful pleading by the Plaintiff will not be allowed to conceal the true nature of the complaint. An independent corrollary of the well-pleaded complaint rule is the complete preemption doctrine. Caterpillar versus Cecil Williams, blank U.S. 55 U.S. Law Week 4804 and nine—I’m sorry, and 4805, June 9, 1987. On occasion the United States Supreme Court has con- cluded that the preemptive force of a statute is so ex- traordinary that it converts an ordinary state common law complaint into one stating a federal claim for pur- poses of the well-pleaded complaint rule, that cite Cater- pillar 55 U.S. Law Week at 4805 and Metro [65] Life versus Taylor, 107 Supreme Court 1542, 1987. oF a rap | Once an area of state law has been completely pre- empted any claim purportedly based on that preempted state law is considered from it’s inception a federal claim, therefore arising under feceral law. Citing Caterpillar at 4806 and Franchise Tax Board at 2854. In this case Plaintiffs have asserted rights arising un- der certain collective bargaining agreements and their con- tractual arrangements with the Defendant. They assert at this time that these rights make them creditors but the claims and the rights which they claim have accrued to them are determined by their contracts with the rail- road, these claims are governed by the Railway Labor Act. The application of this statute, and I should cite the Rail- way Labor Act is 45 U.S.C. 151 et. see. [sic] The applica- tion of this statute and the necessity of its interpretation establish the existence of a federal question as an essen- tial element of the Plaintiff’s cause of action providing the basis for removal. The term by the Plaintiff that their rights make them somehow creditors as a right and they are then creditors under the Minnesota Statutes, represents an interesting academic exercise but it takes [66] but an instant, and the Court immediately determines that those rights are completely defined by the Railway Labor Acts coverage of the contracts in question. The basic injury asserted in this case arises from the employment relationship between the Plaintiffs and the Defendant railroad. The existence and extent of any rights Plaintiffs may have are dependant upon the in- terpretation then of their Railway Labor Agreement. The interpretation of a contract of employment with a rail- road is exclusively under the RLEA |sic] and involves a minor dispute according to that statute. The Railway Labor Act requires matters involving minor disputes to be brought to the railway—sorry, to 33a the National Railway Adjustment Board, the NRAB, and handled according to it’s grievance procedures, citing Elgin, S&E [sic] versus Burley, 325 U.S. 711 at 722 and 3, 1945. That Act and the Railway Labor Acts preemp- tion diverts both the state and the federal Courts of sub- ject matter jurisdiction over minor disputes. Andrews versus Louisville and Nashville, 92 Supreme Court 1562, 1972. The NRAB has exclusive jurisdiction over disputes in- volving collective bargaining agreements between carriers and their employees. Choate versus Louisville, 715 F 2d 369 at 372, Seventh Circuit. [67] Where, as in this case, the dispute arises out of the employment relationship and, in the final analysis, involves an attempt to impose a right claimed to be inci- dent to that relationship, the statutory forum is the NRAB. Railway Labor Executives versus Atchison To- peka, 430 F2d 994 at 997, Ninth Circuit, 1979. Plaintiffs cannot escape the exclusive governance of the RLA by articulating their claims in terms of a State Court action. See Leu versus Norfolk and Western Rail- way, number 86-1377, slip opinion, Seventh Circuit, 1987. Courts have viewed such attempts as end runs around the RLA’s policy of channeling employment disputes toward arbitration, Lancaster and Norfolk [sic] 773 F2d 807, 815, Seventh Circuit, 1985, cert. denied at 107 Supreme Court 1607, 1987. Plaintiffs here seek through their artful pleading to make that and by their efforts to style their claim as one arising under the Minnesota Fraudulent Conveyance Act to make an end run around the scope of the RLA. Because this case involves a dispute which must be arbitrated following the procedures of the RLA, Minne- sota state law is preempted from providing a basis for this claim and from relief. Cite Schroeder versus TWA 702 F2d at 189, 192, Ninth Circit [sic], 1983. 34a [68] Quoting, “If the state Court lacks jurisdiction of the subject matter the Federal Court acquires none, al- though it might be in a like suit, originally brought there —it might, I’m sorry, in a like suit originally brought there, have had jurisdiction. Labert Run Coal Company versus Baltimore and Ohio, 42 Supreme Court 349, 351, 19—1922. The Minnesota Supreme Court—sorry, the Minnesota courts were without jurisdiction over the action between the Plaintiffs and the Defendants, subsequently the United States District Court acquired none, there being none to pass once the District Court action from Minnesota was removed. This action is dismissed under Federal Rules of Civil Procedure 12(b) (1), this Court lacking jurisdiction. Be in recess. (Recess ) 35a APPENDIX C UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 87-5376 ROBERT F. DEFORD, on behalf of himself and all employ- ees of Soo Line Railroad Company affected by the dis- position of Lake States Transportation Division and RAILWAY LABOR EXECUTIVES’ ASSOCIATION, on behalf of itself and represented employees, Appellants, v. Soo LINE RAILROAD COMPANY, a Minnesota corporation, Soo LINE CORPORATION, a Minnesota corporation, DENNIS M. CAVANAUGH, Wisconsin Central Ltd., an Illinois corporation, EDWARD A. BURKHARDT, THOMAS POWER, ROBERT H. WHEELER, JOHN DOE and RICHARD B. OGLIVIE, Appellees. Appeal from the United States District Court for the District of Minnesota [Filed Feb. 9, 1989] 36a JUDGMENT This appeal from the United States District Court was submitted on the record of the district court, briefs of the parties and was argued by counsel. Upon consideration of the premises it is hereby ad- judged and decreed that the district court’s judgment de- nying remand to the state court and dismissing the com- plaint is affirmed. The Court concludes that the district court properly analyzed the preemptive effects of the RLA. It is further adjudged and decreed that under the circum- stances of this case the Interstate Commerce Act (ICA), 49 U.S.C. $$ 10101-11917 (1982), is an appropriate basis to preempt the state law claims. February 9, 1989 Order entered in accordance with opinion. ‘s/ Robert D. St. Vrain Clerk, U.S. Court of Appeals, Eighth Circuit. 37a APPENDIX D UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA FOURTH DIVISION Civil No. 4-87-582 ROBERT F.. DEFORD, et al. Vv. Soo LINE RAILROAD COMPANY, et al. ORDER This matter is before the Court on plaintiffs’ motion to remand this action to state court and defendants’ motion to dismiss the complaint pursuant to Rule 12(b) (1) of the Federal Rules of Civil Procedure. A hearing was held on August 20, 1987. Based on the files, records, and proceedings herein, and for the reasons set forth at the hearing, IT IS ORDERED that: 1. The motion of plaintiffs Deford and Railway Labor Executive Association to remand this action to state court is denied. 2. The motion of defendants Soo Line Railroad Com- pany and Wisconsin Central Limited to dismiss the com- plaint pursuant to Rule 12(b) (1) of the Federal Rules of Civil Procedure is granted. Dated: August 21, 1987 /s/ James M. Rosenbaum JAMES M. RoSENBAUM United States District Judge Filed Aug. 21, 1987 Il. III. IV. VI. 38a APPENDIX E STATUTES RELIED UPON Railway Labor Act, 45 U.S.C. § 151, et seq. (Ex- cerpts) A. Section 2 First, 45 U.S.C. § 152 First B. Section 3, 45 U.S.C. § 153 Interstate Commerce Act, 49 U.S.C. § 10101, ef seq. (Excerpts) A. Section 10505, 49 U.S.C. § 10505 B. Section 10901, 49 U.S.C. § 10901 28 U.S.C. § 1441 (a) Minnesota Uniform Fraudulent Transfer Act, Minn. Stat. Ann. § 513.41, et seg. (Excerpts) A. Section 513.44 B. Section 513.45 Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seg. (Excerpts) A. Section 502(a) and (f), 29 U.S.C. § 1132(a) and (f) Labor Management Relations Act, 29 U.S.C. § 151, et seq. (Excerpts) A. Section 301(a), 29 U.S.C. § 185 (a) eee 39a Statutes Relied Upon I. Railway Labor Act, 45 U.S.C. § 151, et seg. (Ex- cerpts) A. Section 2 First 45 U.S.C. § 152 First It shall be the duty of all carriers, their officers, agents, and employees to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all dis- putes, whether arising out of the application of such agreements or otherwise, in order to avoid any interrup- tion to commerce or to the operation of any carrier grow- ing out of any dispute between the carrier and the em- ployees thereof. B. Section 3 45 U.S.C. § 153 First. There is hereby established a Board, to be known as the “National Railroad Adjustment Board’, the mem- bers of which shall be selected within thirty days after approval of this Act, and it is hereby provided— (a) That the said Adjustment Board shall consist of thirty-four members, seventeen of whom shall be selected by the carriers and seventeen by such labor organizations of the employees, national in scope, as have been or may be organized in accordance with the provisions of section 2 of this Act. (b) The carriers, acting each through its boards of directors or its receiver or receivers, trustee or trus- tees or through an officer or officers designated for that purpose by such board, trustee or trustees or receiver or receivers, shall prescribe the rules under 40a which its representatives shall be selected and shall select the representatives of the carriers on the Ad- justment Board and designate the division on which each such representative shall serve, but no carrier or system of carriers shall have more than one vot- ing representative on any division of the Board. (c) Except as provided in the second paragraph of subsection (h) of this section, the national labor organizations, as defined in paragraph (a) of this section, acting each through the chief executive or other medium designated by the organization or as- sociation thereof, shall prescribe the rules under which the labor members of the Adjustment Board shall be selected and shall select such members and designate the division on which each member shall serve; but no labor organization shall have more than one voting representative on any division of the Board. (d) In ease of a permanent or temporary vacancy on the Adjustment Board, the vacancy shall be filed by selection in the same manner as in the original selection. (e) If either the carriers or the labor organizations of the employees fails to select and designate repre- sentatives to the Adjustment Board, as provided in paragraphs (b) and (c) of this section, respectively, within sixty days after the passage of this Act, in case of any original appointment to office of a mem- ber of the Adjustment Board, or in case of a va- cancy in any such office within thirty days after such vacany occurs, the Mediation Board shall thereupon directly make the appointment and shall select an in- dividual associated in interest with the carriers or the group of labor organizations of employees, which- ever he is to represent. 4la (f) In the event a dispute arises as to the right of any national labor organization to participate as per paragraph (c) of this section in the selection and designation of the labor members of the Adjustment Board, the Secretary of Labor shall investigate the claim of such labor organization to participate, and if such claim in the judgment of the Secretary of Labor has merit, the Secretary shall notify the Medi- ation Board accordingly, and within ten days after receipt of such advice the Mediation Board shall re- quest those national labor organizations duly quali- fied as per paragraph (c) of this section to partici- pate in the selection and designation of the labor members of the Adjustment Board to select a rep- resentative. Such representative, together with a representative likewise designated by the claimant, and a third or neutral party designated by the Mediation Board, constituting a board of three, shall within thirty days after the appointment of the neutral member, investigate the claims of the la- bor organization desiring participation and decide whether or not it was organized in accordance with section 2 hereof and is otherwise properly qualified to participate in the selection of the labor members of the Adjustment Board and the findings of such boards of three shall be tinal and binding. (g) Each member of the Adjustment Board shall be compensated by the party or parties he is to rep- resent. Each third or neutral party selected under the provisions of (f) of this section shall receive from the Mediation Board such compensation as the Mediation Board may fix, together with his neces- sary traveling expenses and expenses actually in- curred for subsistence, or per diem allowance in lieu thereof, subject to the provisions of law applicable thereto, while serving as such third or neutral party. 42a (h) The said Adjustment Board shall be composed of four divisions, whose proceedings shall be inde- pendent of one another, and the said divisions as well as the number of their members shall be as follows: First division: To have jurisdiction over dis- putes involving train- and yard-service employ- ees of carriers, that is, engineers, firemen, hostlers, and outside hostler helpers, conductors, trainmen, and yard-service employees. This di- vision shall consist of eight members, four of whom shall be selected and designated by the carriers and four of whom shall be selected and designated by the labor organizations, national in scope and organized in accordance with sec- tion 2 hereof and which represent employees in engine, train, yard, or hostling service; Pro- vided, however, That each lab [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_1335%3A1. Public record. Not legal advice.