Appellees Brief — Railway Labor Executives' Assn. v. Gibbons

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Nos. 80-415 and 80-1239 ALEXAIO

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

RAILWAY LABOR EXECUTIVES” ASSOCIATION,

Appellant,

Vv.

WILLIAM M. Gissons, Trustee of the Chicago, Rock

Island & Pacific Railroad Company: CONTINENTAL

ILLINOIS NATIONAL BANK AND TRUST COMPANY OF

CHicaGo, as Indenture Trustee; First NATIONAL BANK

oF CHICAGO, as Indenture Trustee, HENRY Crown,

ETAL., UNITED STATES OF AMERICA; INTERSTATE COMMERCE

COMMISSION; AND ANDREW L. Lewis, Jr., Secretary

of Transportation,

Appellees.

Consolidated Appeals From The United States

District Court For The Northern District Of Ilinois And

From The United States Court Of Appeals

For The Seventh Circuit

BRIEF FOR APPELLANT

WILLIAM G. MAHONEY

Joun O'B. CLARKE, JR.

(Counsel of Record)

Hicusaw & Manoney, P.C.

Suite 210

1050 17th Street, NW

Washington, DC 20036

(202) 296-8500

Attorneys for Railway Labor

Executives’ Association

Date: July 22, 1981

ene ca ea Rt ee ae ner Sen en ee

PRESS OF BYRON 5S. ADAMS PRINTING, INC., WASHINGTON, D.C,

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QUESTIONS PRESENTED’

1. Whether the issue of the constitutionality of Sections

106 and 110 of the Rock Island Transition and Employee As-

sistance Act (RITA), as modified by Section 701 of the Stag-

gers Rail Act of 1980, is properly before this Court?

2. Did the Rock Island Reorganization Court improper-

ly enjoin an Act of Congress intended to provide immediate

protective benefits to needy Rock Island employees where

there was no valid showing that the estate would be irrepara-

bly harmed while the Trustee complied with the directives of a

statute which Congress has twice declared to be essential to

the public interest?

*This consolidated proceeding involves two appeals, one (No. 80-

415), from a preliminary injunction entered on June 9, 1980, by the

United States District Court for the Northern District of Illinois, sit-

ting as a railroad reorganization court for the Chicago, Rock Island &

Pacific Railroad; the other (No. 80-1239), from a decision entered by

the United States Court of Appeals for the Seventh Circuit on

December 16, 1980, affirming by an equally divided en banc court an

injunctive order issued by the Rock Island reorganization court in

October 1980. Both appeals have been taken by the Railway Labor

Executives’ Association, a voluntary, unincorporated association of

the Chief Executive Officers of virtually all of the standard labor or-

ganizations which represent railroad employees in this country. The

member organizations of appellant are listed in Appendix B to this

Brief. The Trustee of the Rock Island estate, the First National Bank

of Chicago and the Continental Illinois National Bank and Trust

Company of Chicago, as Indentured Trustees, and Henry Crown, et

al., as shareholders and general creditors, initiated the proceeding

before the reorganization court out of which these appeals have

arisen by requesting declaratory and injunctive relief. That proceed-

ing was one against the United States of America, the Interstate

Commerce Commission, and the Honorable Neil P. Goldschmidt as

Secretary of Transportation. Appellant, an intervenor in the reorga-

nization proceeding, participated therein as an active party. The

Honorable Andrew L. Lewis, Jr., pursuant to Rule 40.3 of the Rules

of this Court, has been substituted for his predecessor as a named ap-

pellee.

3. Did Congress, by specifically providing that nothing

in RITA “‘shall limit the right of any person to commence an

action’’ under the Tucker Act, effectively preclude the conclu-

sion by the courts below that Section 106 of RITA effects an

uncompensated taking of private property for public pur-

poses?

4. Does Congress, afler concluding that the public in-

terest requires adequate protection of railroad employees,

have the power to require the protection of employees as a

term upon which a railroad in reorganization under Section 77

of the Bankruptcy Act may withdraw its assets from the busi-

ness of providing interstate rail transportation?

5. Was the Rock Island Reorganization Court correct in

concluding that the public interest no longer remains an

important part of its exercise of jurisdiction under Section 77

of the Bankruptcy Act?

TABLE OF CONTENTS

Page

SCENE NEED iprientice scpeveyp ped odbrecescse i

SINE ip Bic bob aivodccccdoccbsbsibiebacebes 2

NEE LEE LGU Ls UU div cod cddobesdevbusebes 3

CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVED .... 4

UMMEIIO TE VUE Ga hig o'0-a's Ube oc ccunvscoscwcoecs 4

A. The Demise Of The Rock Island ................ 5

B. Response Of Congress To Rock Island’s Plight .... 10

C. Congress’ Second Response To The Plight Of Rock

II -.0'C Direc oc'c'b s chbbee CARED BRE DE 15

SUMMARY OF THE ARGUMENTS .............0000 cee eees 19

SE 6 5 Vick éc'b web mated eos VER EM pd AEE BC OSU eos 21

I. The Issue Of The Validity Of The Preliminary in-

junction Enjoining The Implementation Of An Act

Of Congress On Constitutional Grounds Is Properly

Before This Court Since That Preliminary Injunc-

tion Presents A Concrete Controversy Involving

The Application Of The Fifth Amendment To Sec-

pene 106 And 110 Of RITA, As Modified By The -

Il. The Courts Below Improperly Enjoined On Fifth

Amendment Grounds An Act Of Congress, Which

Congress Has Twice Declared To Be Essential To

Rail Transportation, Since By Providing A Tucker

Act Remedy To The Rock Island Estate, Congress

Has Precluded A Finding That The Act Could Effect

An Uncompensated Taking Of Property .......... 29

A. By expressly providing that nothing in

RITA shall limit the right of any person to

commence an action under the Tucker Act,

Congress precluded the finding that Sec-

tions 106 and 110 of RITA could effect an

uncompensated taking of property ....... 31

B. Section 106 of RITA is not a regulation

which, on its face, has become a taking of

private property, for by investing in a rail-

road the Rock Island creditors and

shareholders have assumed the risk that

their interests will be subordinated to the

interests of the public in protecting

unemployed Rock Island employees ...... 35

Table of Contents Continued

Page

CAMO. cA ie ctakiaauwmesel er eN end Veloce lee 43

ApPpeNDIx A — Constitutional Provisions And Statutes

GO a ee Raa LAS ee Cal a la

ApPenpix B — List Of RLEA Member Organizations ... 8a

TABLE OF AUTHORITIES

Cases RELIED UPON: Page

Agins v. City of Tiburon, 447 U.S. 255 (1980) ........... 25

Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975) .... 30

American Medical Assoc. v. Weinberger, 522 F.2d 921 (7th

; Ce RU ras Pes on as a Se dlet upbeat

Andrus v. Allard, 444 U.S. 51 (1979) ............0005. 33

Armstrong v. United States, 364 U.S. 40 (1960) ......... 32

aa Co. v. Railroad Commission, 251 U.S. 396

Bryan v. Austin, 354 U.S. 933 (1957) ... 0.6... 00. a ee 21

Cherokee Nation v. Southern K. Ry., 135 U.S. 641

DE AS ich ui pideca Dc ov as bs 0'o's ee RR O's 25, 32

Chicago & N.W. Ry.—Control—Chicago, R. 1. & P. R.,

PET CMe OPO MENTED: ikibicce\ ccvvclicéiwcereses 5

Chicago, R.I. & P.R.—Abandonment, 363 1.C.C. 150

REN? acl Cee De otf aian ss bus ei = whe pine Oh 5, 6, 7

Chicago, R.I. & P. Ry.—Reconstruction Loan, 184 L.C.C.

NE ks 5 igh wk by «alr s Waseca Cees

Coffman vy. Breeze Corporations, Inc., 323 U.S. 316

SEE SOTA Daas ehke ne seco vane eee 19, 28-29

Continental Illinois National Bank vy. Chicago, R.1. & P.

Rega ae teas OOO CAFES): vis veo cave weer cess tees

Dames & Moore v. Regan, Sup. Ct. No. 80-2078, decided

DONG Bs CIOL. ino co CEN BW So cece 0 SSe 19, 24, 25, 32, 33

ett 4 v. Central Baptist Church, 404 U.S. 412 :

La OL MTs CEL Scab etc aeda eee ews |

Directed Service Order No. 1398, 3601.C.C. 289 (1979) .. 7

Directed Service Order No. 1398 (Sub-No. 1), 360 1.C.C.

EE hr. CBIR sok vis cece eeUek cules

Directed Service Order No. 1462, 363 1.C.C. 72 (1980) ... 7-8

Duke Power Co. v. Carolina Environmental Study Group,

Inc., 438 U.S. 59 (1978) ..........000s 7 Fe 9 Bey a

Ecker v. Western Pac. Ry., 318 U.S. 448 (1943) ........ 8, 42

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824) ........ 36

Goldwater v. Carter, 444 U.S. 996 (1979) ...........06. 30

Table of Authorities Continued

Hall v. Beals, 396 U.S. 45 (1969)... 2... eee cece eee ees 22

Hae Indiana, Sup. Ct. No. 80-231, decided June 15,

Hodel v. Virginia Surface Mining & Reclamation Assoc.,

Inc., Sup. Ct. No. 79-1538, decided June 15,

SNE LLG PURER E ULE Cees cng svaedees vcs 19, 28

Hurley v. Kincaid, 285 U.S. 95 (1932) ........ 20, 31, 33-34

In Re Chicago, R. I. & P. Ry., 267 1.C.C. 867 (1947) .... 4

In Re Chicago, R. I. & P. Ry., 257 1.C.C. 307 (1944) .... 5

In Re Lehigh Valley R., 558 F.2d 137 (3rd Cir. 1977) .... = 8

In Re Penn Central Transp. Co., 347 1.C.C. 45 (1973) .... 39

ICC (tbe Tahed Labor Executives’ Assoc., 315 U.S. 373

Loan to Chicago, R. I. & P. Ry., 65 1.C.C. 371 (1920) .... 40

Loan to Chicago, R. I. & P. Ry., 65 1.C.C. 224 (1920) .... 40

Louisville & N.R. v. Mottley, 219 U.S. 467 (1911) ....... 27

NLRB vy, Fainblatt, 306 U.S. 601 (1939) .............. 36

New Haven Inclusion Cases, 399 U.S. 392 (1970) ....... 41

Parker v. Levy, 417 U.S. 733 (1974) ..........0.eceeee 3, 24

Penn Central Merger Cases, 389 U.S. 486 (1968) ........ 40

Penn Central Transp. Co. v. New York City, 438 U.S. 104

SOR ee SEY hc UNS bin'we Whine bo Cambgdeebe 26, 40

RLEA v. Gibbons, 448 U.S. 1301 (1980) (Stevens, J., in

chambers), upheld, 448 U.S. 909 (1980) ......... 14-15

RLEA v. Gibbons, 448 U.S. 909 (1980) ............. 15, 23

Reconstruction Finance Corp. v. Denver & R. G. W. Ry.,

328 U.S. 495 (1946) ........ 6 eee eee 20, 38, 40, 41

Rescue Army v. Municipal Court, 331 U.S. 549 (1947) ... 21

Regional Rail Reorganization Act Cases, 419 U.S. 102

RIO uate sin db ee dieu obs 19, 20, 24, 25, 26, 32, 33

St. Louis S.W. Ry. — Purchase, 363 1.C.C. 320 (1980) .... 11

St. Paul Bridge & T. Ry. — Control, 199 1.C.C. 588 (1934) . 37

San Diego Gas & Electric Co. v. City of San Diego, Sup. Ct.

No. 79-678, decided March 24, 1981 .............

vii

Table of Authorities Continued

Page

Socialist Labor Party v. Gilligan, 406 U.S. 583 (1972) .... 24

Stringer v. United States, 47\ F.2d 381 (Sth Cir. 1973) ... 34

Sweet v. Rechel, 159 U.S. 380 (1895) .............005. 32

United States v. Alaska S.S. Co., 253 U.S. 113 (1920) . 19, 22

United States v. Lowden, 308 U.S. 225 (1939) ...... re ce gf

University of Texas v. Camenisch, Sup. Ct. No. 80-317,

decided April 29, 1981 ...............0 0c cece ee

Usery v. Turner Elkhorn Mining Co., 428 U.S. | rsh if oo

Virginia Petroleum Jobbers Assoc. v. FPC, 259 F.2d 921

RMR ROUT Ek too ata i onscboceerocctekt tebe

Warth v. Seldin, 422 U.S. 490 (1975) ....... 0. cece eens 27

Wellsville, A.&G.R.—Abandonment, 354 L.C.C. 744

SEPP Ua inka Ooi eae ows Vuv eed ewebeewdee'es

CONSTITUTIONAL MATERIALS:

Commerce Clause, Art. 1,§8,cl.3, U.S. Const. . 20, 32, 36

Fifth Amendment, U.S. Const. ......... 4, 17, 21, 27, 30,

31, 33, 34, 38, 40

STATUTES AND CONGRESSIONAL MATERIALS:

Act of July 1, 1862, $18, 12 Stat.497 ................. 40

Bankruptcy Act,

Section 77, 11 U.S.C.§205 ................ 1-2, 4, 8, 41

Section 77(d), 11 U.S.C.§205(d) .................. 8

Bankruptcy Reform Act of 1978, Pub. L. No. 95-598, 92

Stat. 2549, Section 403, 92 Stat. 2683 ............. 2, 41

STIs RAG) aOR EWTN iis o caw dye o buted oe 41

PERRO RDU, cba che cte'day cc ct bes vbdncs cn 37

Yk a Vy 21% Sls Sy SERRE nie one ea 37

18 Cong. Rec. (Appendix) 137 (February 28,1887) .... 40

18 Cong. Rec. 2680 (March 3, 1887) ................. 32

viii

Table of Authorities Continued

Page

aM Railroad Transportation Act of 1933, 48 Stat.

NE EES 7s CCU chica vnebcccscbbeveves 37

H.R. 6837, 96th Cong., 2d Sess. (1980) ............... 10

H.R. 7235, $227, 96th Cong., 2d Sess., 126 Cong. Rec.

H8619 (Sept.9, 1980) .............. 0.000. c eee 15, 39

H. Rpt. No. 96-1430, 96th Cong., 2d Sess. (1980) .... - e

H. Rpt. No. 96-1041, 96th Cong., 2d Sess. (1980) .... 12, 22

H. Rpt. No. 96-839, 96th Cong., 2d Sess. (1980) .. ‘ 2 l 2,

H. Rpt. No. 1077, 49th Cong., Ist Sess. (1886) ........ 32

Interstate Commerce Act, 49 U.S.C. § 10101, ef seq.

49 U.S.C. § 10903(b)(2) 2.0.0... eee eee 37, 38, 40

BTR BETAS Geek bins vo voce cache susbacekvls 7

49 U.S.C.$ 11347 .......... Sb cle ube pemee meee 9, 13, 38

Kansas Statutes Ann. § 66-501 ..................-005- 40

Milwaukee Railroad Restructuring Act, 45 U.S.C. §901,

et seq.

SIE FBS CID ica ccc cc veveysevinicecos 12, 26

Section 17, 45 U.S.C.§915 .............. 8-9, 38, 40, 41

Railway Labor Act, 45 U.S.C.§151, ef seg. ............ 6

Section 5, First, 45 U.S.C. § 155, First .............. 6

BL FP RIMERNOS cc ckccdsondedsdcenceset 6

Section 10, 45 U.S.C.$ 160... coke cceciccccets 7

Railroad Unemployment Insurance Act, 45 U.S.C. § 351,

SOR aac CeO b hese ed opdaeeest-coSpesveeeccseeeed

Rock Island Transition and Employee Assistance Act,

Pub. L. No. 96-254, 94 Stat. 399, 45 U.S.C. § 1001, er

BC ec E CRUE MULEDS o's o.Wk otKby i CaMOe decree 1,11

Section 102,45 U.S.C.$1001 ................... 38, 39

Section 104, 45 U.S.C.§ 1003 ................0005. 11

Section 105, 45 U.S.C.$1004 ................000.. 11

Section 106, 45 U.S.C.$1005 ................. in passim

Table of Authorities Continued

Page

Section 107, 45 U.S.C.§1006 .............. 0c eee ll

Section 110, 45 U.S.C.§ 1008 ................. in passim

Section 111, 45 U.S.C.81009 ........ cc ccncenccees 11

BOG TAA, Ca APTS is 6c bcc vc cadouwny sbaepe 11

Section 119, 45 U.S.C.§ 1014 ........ 2... cece eee 11

Section 120,45 U.S.C.§1015 ......... 0. cece eee 11

Section 122,45 U.S.C.$ 1017 .......... cece eee eee 11

Section 124(a), 45 U.S.C.§1018(a) ........... 2, 16, 18

Section 124(b), 45 U.S.C. § 1018(b) ..............6. 16

Section 124(c), 45 U.S.C.$1018(c) ........ 4, 15, 32, 34

Royalty Adjustment Act of 1942, 56 Stat. 1013 ........ 28

eas he Act of 1980, Pub. L. No. 96-448, 94 Stat.

Section 227, 94 Stat. 1931 ........ 0... cece eee eee 37

Section 701, 94 Stat. 1959 ...............0045. 2, 15, 25

SF aac aien 6 cab Sne vpocedcccdvesonnvenan 27

Be CIEE cetesbabccsccessvess 3, 16, 18, 19, 24

Tucker Act, 24 Stat. 505, 28 U.S.C. §§ 1346(a), 1491 in passim

OTHER MATERIALS:

Bankruptcy Rule 8-303, Chapter 8 Rules .............. 8

meee? oad No. 12,159, 44 Fed. Reg. 54687 (Sept. 21,

C. M. Rehmus, Railway Labor Act at Fifty(GPO, 1977) . 37

Rule 65(a)(2), Fed. R. Civ. P. ... 0... ee cece ee eee 25

3 Story, COMMENTARIES ON THE CONSTITUTION OF THE

Unitep STATES $1784 (1833) ..............00005- 31

F. Wilner, Competitive Equity (AAR, 1981) ............ 40

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

Nos. 80-415 and 80-1239

RAILWAY LaBor Executives’ ASSOCIATION,

Appellant,

Vv.

WILLIAM M. Gipsons, Trustee of the Chicago, Rock

Island & Pacific Railroad Company, CONTINENTAL

ILLINOIS NATIONAL BANK AND TRUST COMPANY OF

Cuicaco, as Indenture Trustee; First NATIONAL BANK

or CuHIcaGco, as Indenture Trustee, Henry Crown,

ET AL., UNITED STATES OF AMERICA, INTERSTATE COMMERCE

COMMISSION; AND ANDREW L. Lewis, Jr., Secretary

of Transportation,

Appellees.

Consolidated Appeals From The United States

District Court For The Northern District Of Illinois And

From The United States Court Of Appeals

For The Seventh Circuit

BRIEF FOR APPELLANT

On May 30, 1980, the Rock Island Transition and Employee

Assistance Act [hereinafter, **RITA*’] was enacted into law as

Title I of Pub. L. No. 96-254, 94 Stat. 399. In Section 106 of

that Act, 45 U.S.C. $1005, Congress provided a detailed

scheme to assure that needy employees of the Chicago, Rock

Island & Pacific Railroad Company (hereinafter, *‘CRI"’ or

**Rock Island"’) received immediate financial assistance.

However, on June 9, 1980, the United States District Court

for the Northern District of Illinois, sitting as a railroad reor-

ganization court for the Rock Island under Section 77 of the

Bankruptcy Act, 11 U.S.C. § 205,' issued a preliminary injunc-

tion at the request of the Trustee, the major shareholders, and

certain creditors, preliminarily enjoining implementation of

that employee protective program. Appellant Railway Labor

Executives’ Association [hereinafter, ‘“‘RLEA*’] noted and

then perfected an appeal to this Court from that interlocutory

injunction (No. 80-415). On April 27, 1981, this Court

directed that further consideration of the question of jurisdic-

tion be postponed to the hearing of the case on the merits.

While appellant's jurisdictional request was pending before

this Court, Congress passed the Staggers Rail Act of 1980

(hereinafter, “SRA*), Pub. L. No. 96-448, 94 Stat. 1895,

which, in Section 701, amended Section 106 of RITA. The

SRA was enacted on October 14, 1980. By an order dated

October 15, 1980, as modified by a subsequent order dated

October 16, 1980, the Rock Island reorganization court again

enjoined, preliminarily, implementation of Section 106 of

‘RITA and declared that the statutory provision was un-

constitutional as effecting an uncompensated taking of private

property for public purposes. Appellant RLEA immediately

took an appeal from that interlocutory order to the United

States Court of Appeals for the Seventh Circuit pursuant to

Section 124(a) of RITA, 45 U.S.C. §1018(a). On December

16, 1980 the court of appeals entered an order affirming by an

equally divided en banc court the October 1980 preliminary in-

junction, Appellant RLEA noted and thereafter perfected an

appeal to this Court (No. 80-1239), and on April 27, 1981,

this Court noted probable jurisdiction and consolidated this

case with appellant's appeal in No. 80-415.

OPINIONS BELOW

No opinions or orders issued in these cases by the courts

below are reported. The preliminary injunction at issue in No.

‘Section 77 of the Bankruptcy Act has been repealed by the

Bankruptcy Reform Act of 1978, Pub. L. No. 95-598, 92 Stat. 2549,

but that repeal is not effective for cases which were pending under

Section 77 when the Reform Act was enacted. Section 403(a), 92

Stat. 2683.

80-415 was issued by the Rock Island reorganization court on

June 9, 1980 (J.A.? 159a-60a) and was supported by oral state-

ments of that court given on June 9, 1980 (J.A. 15la-58a),

and then on June 20, 1980 (J.A. 177a-84a) when that court

denied motions to reconsider. On October 7, 1980, the reor-

ganization court orally stated its tentative conclusions why it

believed the SRA amendments did not cure, in its opinion,

the constitutional defects which it saw in RITA (J.A. 20la-

. 04a), and it thereafter issued an order dated October 16, 1980,

preliminarily enjoining Sections 106 and 110 of RITA, as

amended, J.A. 205a-08a. That order was modified by a minute

order dated October 16, 1980. J.A. 209a. On December 16,

1980, the United States Court of Appeals for the Seventh Cir-

cuit, sitting en banc, affirmed by an equally divided court (J.A.

210a-1 la) the October 1980 preliminary injunction without an

opinion. The judgment accompanying the court of appeals

unpublished per curiam order is reproduced in the Jurisdic-

tional Statement in No. 80-1239, at 3la-32a.

JURISDICTION

Appellant RLEA’s appeal in No. 80-1239 involves an appeal

from an order of the United States Court of Appeals for the

Seventh Circuit affirming an interlocutory order which held

that portions of an Act of Congress were unconstitutional,

and preliminarily enjoined agencies of the federal govern-

ment, as well as the Rock Island Trustee, from complying

with certain commands of that Act. Appellant RLEA re-

spectfully submits that this Court has jurisdiction over this ap-

peal by virtue of 28 U.S.C. $1252. Accord, Parker v. Levy, 417

U.S. 733 (1974). The order and judgment of the court of ap-

peals were entered on December 16, 1980, and appellant

RLEA noted its appeal on December 19, 1980. J.A. 16a. Ap-

pellant RLEA docketed its appeal with this Court on January

21, 1981.

2“*J_A.”’ as used herein refers to the Joint Appendix.

Appellant RLEA’s appeal in No. 80-415 involves an appeal

from an earlier order declaring portions of an Act of Congress

unconstitutional and preliminarily enjoining agencies of the

Federal Government, as well as the Rock Island Trustee,

from complying with certain commands of that Act. That

preliminary injunction was entered on June 9, 1980, and ap-

pellant RLEA noted its appeal to this Court on June 11, 1980.

J.A. 10a. Appellant's appeal was timely docketed on Septem-

ber 15, 1980. However, as explained infra at p. 21 n.12, appel-

lant RLEA respectfully submits that the events in No. 80-

1239 have rendered its appeal in No. 80-415 moot. Conse-

quently, appellant RLEA suggests that this Court note proba-

ble jurisdiction and then vacate the June 9th injunction as

being moot.

CONSTITUTIONAL PROVISIONS AND STATUTES

INVOLVED

These appeals involve the validity of Sections 106 and 110

of RITA, 45 U.S.C. $§ 1005, 1008, as amended by the SRA.

These provisions, both as originally enacted and as amended,

are set forth in Appendix A to this Brief. Sections 106 and 110

of RITA have been asserted to be contrary to the commands

of the Fifth Amendment to the Constitution of the United

States, which is also reproduced in Appendix A. Section

124(c) of RITA, as added by the SRA, 45 U.S.C. § 1018(c), is

involved as well, and it is reproduced in Appendix A.

STATEMENT OF THE CASE

Incorporated in Delaware in 1947, the Rock Island is the

successor in interest to the Chicago, Rock Island and Pacific

Railway, a carrier which was in reorganization under Section

77 of the Bankruptcy Act from 1933 to 1947.) In re Chicago

R.1, & P.Ry., 267 1.C.C. 867 (1947); see also, 257 1.C.C. 307

eee tee ee

» The Rock Island was one of the first carriers to use Section 77 of

the Bankrupicy Act, and it was in that proceeding, /.¢., the reorgani-

zation of the Chicago, Rock Island and Pacific Railway Company,

that this Court upheld the constitutionality of that statute. Continen-

tal Ill. Nat'l Bank v. Chicago, R.1. & P. Ry., 294 U.S. 648 (1935).

(1944). Originally chartered in 1847 the Rock Island's pre-

decessor companies grew over the years by consolidations,

acquisitions and construction of lines so that by the mid

1970's the CRI was one of the largest railroads in this country.

By 1975, the Rock Island operated in thirteen (13) states, pri-

marily in the midwestern region of the country, and its system

consisted of 8,139 miles of main line track, 2,329 miles of

branch lines, and 763.2 miles of trackage rights over other car-

riers. Chicago, R.I. & P.R.— Abandonment, 363 1.C.C. 150, 154

(1980). Approximately 10,000 workers were employed by the

Rock Island in 1978 to perform those operations. The impor-

tance of the CRI system is exemplified by a 1974 statement of

the Interstate Commerce Commission (hereinafter, ‘ICC’ or

**Commission’’] in which the ICC described the Rock Island

as providing a ‘‘service which is an important segment of the

continental transportation system.’ Chicago & N.W. Ry.—

Control— Chicago, R.I. & P.R., 347 1.C.C. 556, 595 (1974).

Unfortunately, the CRI’s financial posture by the close of

1974 did not assure its continued survival.

A. The Demise Of The Rock Island

During the years after its capital restructuring in 1947, the

Rock Island's operating revenues increased, but not as fast as

the increase in its operating and maintenance expenses. To

counter this increase in costs, the CRI deferred maintenance,

but by 1965 the carrier began to sustain a net loss, and by 1967

it began to show a net loss from railway operations alone. Chi-

cago & N.W. RY—Control, supra, 347 1.C.C. at 565, 691-96.

That deficit operation posture did not improve by 1975 (see,

Chicago, R.I. & P.R.— Abandonment, supra, 363 1.C.C. at 175),

but rather, became more critical so that on March 17, 1975,

the Rock Island once again sought the aid of Section 77 of the

Bankruptcy Act to restructure its financial base. J.A. la. That

petition for reorganization was approved on March 17, 1975,

and on March 28, 1975, appellee William M. Gibbons was ap-

pointed Trustee of the debtor. J.A. la.

After the petition for reorganization was filed, the Rock Is-

land continued to operate, first as a debtor-in-possession (J.A.

la), and then under the direction of the Trustee. But even

though the carrier’s cash position was temporarily improved

by its ability under Section 77 to defer interest and principal

payments, the Rock Island continued to experience operating

losses as well as a steady erosion of its traffic base. Operating

losses had increased from $6.5 million in 1968 to $22.2 million

in 1974, and by the end of 1977 the operating loss for that year

amounted to $38.5 million. Chicago, R.]. & P.R.—Abandon-

ment, supra, 363 1.C.C. at 175. The Rock Island’s rapidly

deteriorating financial position was exacerbated by the severe

winter of 1978, which not only dramatically increased its

losses, but also damaged its physical plant. 363 I.C.C. at 177-

81. Consequently, by the summer of 1979, the future of the

Rock Island was not bright; moreover, its creditors and share-

holders were demanding an end to deficit operations and the

liquidation of that carrier.

During the control by Trustee Gibbons and the reorganiza-

tion court, the Rock Island continued to bargain with its em-

ployees pursuant to the Railway Labor Act, 45 U.S.C. $151, et

seq. In 1977, however, the Trustee informed those organiza-

tions with which the CRI had bargained as a participant with

other railroads on a national level, that it would no longer ne-

gotiate its work rules and wages on that basis. J.A. 275a. After

more than two (2) years of negotiations, a labor organization

representing approximately 1,600 Rock Island employees

(J.A. 275a) was unable to reach an agreement with the

Trustee. On June 20, 1979, the National Mediation Board

proffered arbitration in accordance with Section 7 of the Rail-

way Labor Act, 45 U.S.C. § 157. J.A. 276a. That proffer was ac-

cepted by the labor organization, but was rejected by the

Trustee. J.A. 276a. Subsequently, the labor organization con-

tinued to negotiate with the Trustee under the auspices of the

National Mediation Board during the ‘‘cooling-off’ period

provided for by Section 5, First of the Act, 45 U.S.C. § 155,

First. J.A. 276a. On August 28, 1979, at the expiration of the

status quo period, that labor organization struck the Rock Is-

land. One day later, a second labor organization which repre-

sented approximately 2,500 CRI employees, also struck the

Rock Island. J.A. 275a, 277a. Following these actions, the

Trustee ‘‘locked-out”’ the striking Rock Island employees and

abolished the positions of its other organized employees; the

Trustee then attempted to operate a truncated system with

non-union personnel.

On September 20, 1979, the President, acting pursuant to

Section 10 of the Railway Labor Act, 45 U.S.C. § 160, created

an Emergency Board to investigate tite disputes, thereby, in-

voking the status quo provisions of Section 10 of the Railway

Labor Act. Executive Order No. 12,159, 44 Fed. Req. 54687

(September 21, 1979). Because of its lack of start-up capital,

the Rock Island could not resume full operations in compli-

ance with the status quo provisions of the Railway Labor Act,

and on September 26, 1979, the Commission directed the

Kansas City Terminal Railway Company [hereinafter,

“*KCT’’] to operate ‘‘virtu>!ly all’ of the Rock Island lines

under 49 U.S.C. § 11125. Directed Service Order No. 1398, 360

1.C.C. 289, 290-92 (1979). As the ICC explained in its Aban-

donment Report: ‘‘Rock Island’s cashlessness of September

1979 was the result of an arduous and painful erosion of its

traffic base and facilities." Chicago, R.J. & P.R.—Abandon-

ment, supra, 363 1.C.C. at 160. On September 26, 1979, the re-

organization court denied the Trustee’s oral application for

authority to continue operating the CRI system. J.A. 3a.

Directed Service operations began on October 5, 1979, and

continued into March 1980 when the ICC funds were near

exhaustion. See, Directed Service Order No. 1398 (Sub-No. 1),

360 I.C.C. 478 (1979). Those operations by the KCT ceased

on March 23, 1980, due to a lack of appropriated funds, but

nevertheless, the need for Rock Island service which war-

ranted the invocation of Section 11125 continued to exist.

Directed Service Order No. 1462, 363 1.C.C. 72, 74 (1980). To

meet that need, the ICC directed various railroads under Sec-

tion 11125 to operate portions of the CRI system on a volun-

tary basis without compensation. /d. As the Commission

stated in explanation of its actions:

Shippers along the involved lines still require significant

rail service. A prolonged cessation of service after the ex-

piration of Directed Service Order No. 1398 on March 23,

1980, would disrupt local traffic all along these lines.

In view of the urgent need for continued service over

Ri’s lines pending the implementation of long-range

solutions, we consider it imperative to authorize some

form of interim service.

363 I.C.C. at 74. That action was only a stop-gap measure,

however, because the Commission’s authority to direct oper-

ations over CRI lines was for a iimited duration —/.e., only 240

days from October 5, 1979. /d. at 75. Proceedings before the

reorganization court in early 1980 made it clear that the Rock

Island would most likely not be able to resume operations

when directed service ended.

On January 25, 1980, the CRI reorganization court con-

cluded that the railroad was not reorganizable. However, the

reorganization court made that conclusion without the benefit

of a report from the ICC under 11 U.S.C. § 205 (d), and thus,

it refused to transmit to the ICC, as mandated by Bankruptcy

Rule 8-303, the plan of reorganization which had been filed by

the Trustee on December 28, 1979. Instead, that court or-

dered the Trustee to plan for the liquidation of the debtor.‘

Thereafter, the reorganization court began to authorize cer-

tain acts on the part of the Trustee designed to accomplish liq-

uidation of the estate by either abandonment of lines or sales

of Rock Island property to interested purchasers. On April 14,

1980, the reorganization court authorized the Trustee to file

by April 24, 1980, an application with the ICC under Section

17(a) of the Milwaukee Railroad Restructuring Act

———

4 Appellant RLEA took an appeal from the liquidation order to the

United States Court of Appeals for the Seventh Circuit (No. 80-

1353) on the ground, inter alia, that a Section 77 reorganization court

does not have jurisdiction under Section 77 to order and to control

the liquidation of a railroad in reorganization. See, Ecker v. Western

Pac. R., 318 U.S. 448 (1943); In re Lehigh Valley R., 558 F.2d 137

(3rd Cir. 1977). On February 11, 1981, the court of appeals affirmed

the liquidation order (J.A. at 377a), and on May 12, 1981, RLEA

filed with this court a petition for a writ of certiorari to review that

decision. Sup. Ct. No. 80-1899. That petition is still pending.

(hereinafter, “*MRRA’’], 45 U.S.C. §915(a),° for “‘its report

confirming the abandonment of the Rock Island’s total rail-

road system subject to sale of portions of such system to other

entities for their operations thereof. . . ..’ Order No. 232 at 1-

2. The ICC was given until May 24, 1980, in which to file its

advisory report, and any party desiring to comment on that re-

port was given until May 30, 1980 to do so in writing; a hear-

ing was set for June 2, 1980. /d. at 2.

On June 2, 1980, three days after RITA was enacted, the

CRI reorganization court acted upon the Trustee’s motion to

abandon the entire Rock Island system and ruled that the

‘‘discontinuance of all of its [CRI’s] rail services and obliga-

tions as a common carrier is hereby confirmed and decreed

.... Order No. 248 at 2; J.A. 271a. Moreover, the reorgani-

zation court also provided in that order that no provisions

should be imposed to protect employees since:

[Llabor protective conditions or arrangements are not re-

quired of Rock Island’s estate pursuant to Section 17 of

the MRRA by reason of Rock Island’s systemwide termi-

nation of operations and total line abandonment which do

not warrant further consumption of Rock Island’s assets

for protection payments to employees whose jobs with

Rock Island are no longer in existence by reason of such

total abandonment and operational discontinuance. . .,

and, that consistent with ICC precedent, with the Rock

Island’s constitutional right to abandon its lines and dis-

continue its service, and with the equities of the Rock Is-

land situation, no labor protection arrangements may be

imposed on the Rock Island estate .... /d. at 1-2; J.A.

270a-7 la.*

5 Section 17(a) of the MRRA gave the reorganization court the au-

thority to authorize abandonments of Rock Island Lines, and it also

provided that: “‘In authorizing any abandonment pursuant to this

section, the court shall require the carrier to provide a fair arrange-

ment at least as proteciive of the interests of employees as that re-

quired under [49 U.S.C. §11347] ....”

*On June 9, 1980, RLEA noted an appeal from that order (7th Cir.

No. 80-1788), and on August 4, 1980, the United States also noted

an appeal. 7th Cir. No. 80-2075. RLEA’s appeal was argued on June

10, 1981.

B. Response of Congress To Rock Island's Plight

Shortly after the CRI reorganization court ordered the

Trustee to liquida'e the Rock Island, Congress began to con-

sider legislation designed to preserve essential Rock Island

services, albeit through other carriers. See, H.R. 6837, 96th

Cong., 2d Sess. It was soon realized, however, that in order to

deal effectively with the problems created by the demise of the

Rock Island, Congress would have to address the treatment of

Rock Island employees. As the record in this case clearly

shows, there was, and still is an urgent need to consider the

interest of Rock Island employees.

In 1978, the Trustee employed 10,749 people to operate the

CRI (J.A. 86a, see also, J.A. 165a); 6,389 of those employees

had been employees of the CRI for ten (10) years or more,

and 1,590 of those long time workers had been with the Rock

Island for thirty (30) or more years. J.A. 86a. By August 1979,

the number of Rock Island employees had dropped to 9,713,

and by December 1979, that number had further declined to

8,407. J.A. 99a; 13a. By June 1980, only 2,641 Rock Island

employees were shown as having been retained in the various

operations over CRI lines. J.A. 89a-90a; 165a. By that time,

2,557 other Rock Island employees were receiving benefits

under the Railroad Unemployment Insurance Act, 45 U.S.C.

$351, et. seq., 43 other employees who were unemployed had

exhausted their benefits under that Act, some employees had

retired, and many others were unaccounted for. J.A. 102a,

165a. The number of unemployed Rock Island employees in-

creased over the summer of 1980, and by September 1980,

3,704 Rock Island workers were drawing Railroad Unemploy-

ment Insurance Benefits—i.e., a maximum cf $25 per day for

(10) days during each fourteen (14) day registration period.

J.A. 97a, 99a; 13a.

Rail labor had attempted to address the problem of the

treatment of Rock Island and other bankruptcy carrier em-

ployees in the midwest by entering into an agreement on

March 4, 1980 with major railroads involved in the midwest

rail restructuring. That agreement, commonly called the

March 4 Hiring Agreement, was entered into “‘in an attempt

to provide as many of its members with jobs as possible.’’ Sv.

Louis S.W. Ry. — Purchase, 363 1.C.C. 320, 380(1980). As the

ICC explained in examining the scope of that agreement:

‘*Few carriers seemed willing to purchase portions of RI or

Milwaukee in large part due to the expenses of labor protec-

tion. In order to give carriers an incentive to purchase RI and

Milwaukee lines, and thus hire RI and Milwaukee employees,

RLEA”’ agreed to the Hiring Agreement levels of protection

for certain employees. /d. That agreement, however, was only

half of the employee protections required in the Rock Island

situation since it did not provide any protection for CRI em-

ployees not hired by an acquiring carrier. See, H. Rpt. No. 96-

839, 96th Cong., 2d Sess. at 53-62(1980). Congress, in its

consideration of the proposals which became RITA,

addressed itself to the treatment of ‘‘those individuals who

will not be employed by a temporary operator or a permanent

carrier.”’ /d. at 22.

Shortly before the expiration of permissible directed service

for the Rock Island lines, Congress passed on May 22, 1980,

the bill which became Public Law 96-254 on May 30, 1980. In

several provisions of Title I to that law (/.e., RITA), Congress

provided: (1) a means to continue interim operations until a

permanent solution was obtained (e.g., Sections 104, 120, and

122, 45 U.S.C. $ 1003, 1015 and 1017); (2) a source of federal-

ly financed funds to acquire Rock Island properties (Section

112, 45 U.S.C. § 825); and (3) that the ICC was to expedite all

applications to acquire or to lease Rock Island lines. Section

111, 45 U.S.C. § 1009. In other provisions of RITA, Congress

provided assurances of protections for the interests of CRI

employees, including a compromise employee protective ar-

rangement (Section 106, 45 U.S.C. $ 1005), priority of hiring

(Sections 105, 107, 45 U.S.C. § 1004, 1006), and retraining as-

sistance to separated CRI employees. Section 119, 45 U.S.C.

$1014. In Section 110 of the Act, 45 U.S.C. § 1008, Congress

provided that the Trustee could obtain a federal loan guaran-

tee to acquire the funds needed to comply with Section 106.

Section 106 of RITA and its funding provision Section 110,

are the provisions at issue in these consolidated cases.

Section 106 of RITA was patterned after Section 9 of the

MRRA, 45 U.S.C. $908, and, as the House report explained:

[P]rovides that the representative of the Rock Island

Trustee and representatives of the Rock Island em-

loyees, with the assistance of the National Mediation

ard, shall negotiate an employee protection arrange-

ment within ten days of enactment. Should those negotia-

tions prove unsuccessful, the ICC will impose, not later

than 30 days after enactment, a fair and equitable ar-

rangement no less protective of the employees than

under section 9 of the Milwaukee Railroad Restructuring

Act. The employee protection payments shall be admin-

istrative expenses as they were under section 9(d) of the

MRRA.... The ICC, in imposing protection, shall con-

sider benefits including moving expenses, separation al-

lowances, health insurance benefits and other benefits,

subject to the $75 million limitation. Because litigation

may result from this provision, the bill provides for an

expedited litigation procedure.

H. Rpt. No. 96-839, supra, at 22.

Congress carefully drafted that legislation to provide for an

expeditious implementation of the mandated arrangement to

protect Rock Island employees, and in the Conference Report

on that bill, the conferees noted in reference to Section 106:

This section mandates early implementation of employee

protection to avoid disruption of rail service and undue

displacement of employees. The conferees intend that if

no agreement is reached within the initial 10-day period

and the ICC prescribes an agreement, the bankruptcy

court will take whatever actions are appropriate and nec-

essary for the immediate implementation of such agree-

ment, so that payments to Rock Island employees will be

made forthwith, notwithstanding any ensuing litigation con-

cerning such payments. The conferees believe that legislation

is essential to provide for an orderly transition.

H. Rpt. No. 96-1041, 96th Cong., 2d Sess. at 26(1980) (em-

phasis added).

Section 106 was intended to be a compromise of a potential-

ly larger obligation under Section 17(a) of the MRRA to pro-

vide employee protective benefits as developed under 49

U.S.C. § 11347 (H. Rpt. No. 96-839, supra, at 21-22), and it

was believed that: ‘‘In determining the constitutionaiity of the

statute, .. . the court will find that the benefits conveyed by

this statute to the estate of the bankrupt railroad are so great

so as to make any claims of constitutional ‘taking’ untenable.”

Id. at 22. That belief was premised upon Congress’ opinion

that as ‘‘part of the [liquidation] . . . order, the Rock Island

must obtain a certificate of abandonment from the bankruptcy

judge with a fair arrangement for employees at least as protec-

tive’ of their interests as that required by 49 U.S.C. § 11347.

Id. at 21; see also, Id. at 23. However, as shown above, three

(3) days after RITA was enacted, the CRI reorganization

Court ruled that the estate would not have to provide any em-

ployee protection in abandoning its rail system.

Three (3) days after the court authorized that abandon-

ment, the Trustee along with the principal creditors and

shareholders of the debtor filed a twenty-six (26) page Com-

plaint with the reorganization court on June 5, 1980, seeking

both a judgment declaring the entire Act unconstitutional,

and an injunction enjoining its enforcement. J.A. 21a. A hear-

ing on the Trustee’s and creditors’ request for interlocutory

relief was conducted on June 9, 1980, before United States

District Judge Frank J. McGarr sitting as the CRI reorganiza-

tion court. At the conclusion of that hearing the court ruled

that Sections 106 and 110 of RITA dealing with an employee

protection arrangement were unconstitutional as depriving

the estate of property for a public purpose, and possibly for

other reasons as well. J.A. 153-54a, 183a. The Court, without

making a specific finding of irreparable harm except conclud-

ing that the Act was unconstitutional, issued a preliminary in-

junction: (1) enjoining the ICC from asserting jurisdiction to

consider or to impose any employee protective arrangement,

(2) enjoining the Trustee from entering into negotiations with

labor representatives to arrive at an agreement under RITA,

and (3) enjoining Secretary of Transportation Neil P. Gold-

schmidt from complying with obligations imposed by Section

110(a) of the Act. J.A. 160a.

On June 11, 1980, RLEA filed a notice of Appeal to this

Court from that order (J.A. 10a) and on September 15, 1980,

it perfected that appeal (No. 80-415) by filing its Jurisdictional

Statement. The United States also noted an appeal from the

June 9th order (J.A. 10a); however, it did not perfect its ap-

peal. Rather, in November 1980 the government filed a plead-

ing as an appellee in RLEA’s appeal asserting that the SRA

amendments rendered RLEA’s appeal from the June 9th or-

der moot. The government suggested that this Court note

probable jurisdiction and vacate the injunctive order.

On June 20, 1980, the United States filed a motion with the

District Court requesting that court to reconsider its ruling of

June 9, 1980, and to vacate the injunction (J.A. 10a). Appel-

lant RLEA and the ICC supported that motion (/d.), but after

hearing oral argument on June 20, 1980, the court denied

those requests. In doing so, the court reiterated its earlier

view that Sections 106 and 110 of RITA were unconsitutional

for several reasons, but specifically enumerated only one such

reason —i.e., ‘‘any imposition of labor protection by Congress

on the Rock Island payable out of the Estate was an un-

constitutional taising.”’ J.A. 184a.

Appellant RLEA filed with this Court on June 21, 1980, an

application for a stay of that preliminary injunction, but on

June 28, 1980, Mr. Justice Stevens denied that request with a

written statement. After examining the pleadings filed with

the application for a stay, Mr. Justice Stevens stated:

... fam now of the opinion that Judge McGarr was prob-

ably correct in concluding that the Act authorizes an un-

constitutional taking or property of the estate. It appears

to direct a transfer of $75 million off the top of the

estate’s assets to the employees. While such a transfer

might be permissible in the course of a genuine reorgani-

zation, at least as of this moment, | have difficulty per-

ceiving how, in the context of a liquidation, this is any-

thing other than a simple taking of the property of the

general creditors, as the trusice argues.

RLEA v. Gibbons, 448 U.S. 1301, 1305 (1980) (Stevens, J., in

chambers). Mr. Justice Stevens then went on to note that

since it was not clear that the Tucker Act (28 U.S.C. § 1491),

was available, there was a ‘‘strong possibility that a stay would

set in motion a chain of events that would lead to substantial

payments that are unconstitutional and unrecoverable .. . .”’

/d. Such a possibility was, according to Mr. Justice Stevens, *‘a

sufficient showing of irreparable damage [so as] . . . to support

the entry of the preliminary injunction.”’ /d. On July 2, 1980,

the full Court, with three Justices dissenting and one Justice

abstaining, voted to deny that stay request. 448 U.S. 909

(1980).

C. Congress’ Second Response To The Plight Of Rock Island

Employees

When it became apparent that litigation over the validity of

Sections 106 and 110 of RITA would delay the immediate dis-

tribution of funds to needy Rock Island employees, Congress

again considered that legislaion. E.g., H.R. 7235, $227, 96th

Cong., 2d Sess., 126 Cong. Rec. H8619 (September 9, 1980).

On September 30, 1980, Congress passed the Staggers Rail

Act of 1980, and by Section 701 of that Act amended RITA.

Section 701 (a) (1) addressed the concern of this Court that the

Tucker Act remedy might not be available to persons who

belived they were deprived of property by virtue of RITA; it

added a new provision (Section 124, 45 U.S.C. § 1018) which

provided in subsection (c) that: ‘‘Nothing in this Act. . . shall

limit the right of any person to commence an action in the

United States Court of Claims under section 1491 of title 28,

United States Code (commonly referred to as the Tucker

Act).’” As Congress explained in its Conference Report to ac-

company the SRA, H.Rpt. No. 96-1430, 96th Cong. 2d Sess.

at 138 (1980):

By specifically stating that there is a Tucker Act remedy,

the benefits and allowances will immediately become

available to the qualifying Rock Island employees and the

Trustee may pursuc his allegations of unconstitutional ac-

tion under the Tucker Act.

To assure further that there would be no delay in the distribu-

tion of funds to employees, Congress added as Section

124(a)(1) of RITA a provision which provided that: *‘Not-

withstanding any other provisions of law [i.e., 28 U.S.C.

§ 1252], any appeal from .. . any decision of the bankruptcy

court with respect to the constitutionality of any provision of

this Act ... shall be taken”’ to the Seventh Circuit; and it

added as Section 124(b) of RITA the requirement that any

such appeal ‘‘involving section 106 or 110 of this title’ be de-

cided within sixty (60) days by that court sitting en banc.

Section 701(b)(1) of the SRA modified the provisions of

Section 106 of RITA and reenacted that section. These modi-

fications to Section 106 may readily be seen by examining the

side-by-side comparison of the two Acts in Appendix A,

hereto; but basically the new provision established a shorter

schedule for the negotiation or imposition of a protective ar-

rangement (H.Rpt. No. 96-1430, supra, at 137), and it

repealed the anti-stay and limited review features of the origi-

nal provision. Compare, Section 106(d), as amended. Section

110 was also modified by the SRA, for Section 701(a)(2)

added the words ‘‘to employees’? immediately after ‘‘lia-

bility’’ in Section 110(e) of RITA, thus eliminating the con-

tention that Section 110(e) removed the Tucker Act remedy.

Shortly after the SRA bill was sent to the President for his

signature, appellant RLEA, the United States end the ICC

asked the CRI reorganization court to vacate the June 9th in-

junction. J.A. lla. Appellant RLEA also requested that the

court direct the Trustee to negotiate with labor to devise a

protective agreement under Section 106(a). Appellant and the

Government parties asserted that enactment of the SRA

would moot the June 9th injunction, and that by expressly

providing that the Tucker Act was available to the appellees,

Congress eliminated appellees’ claim of irreparable harm. Oral

argument was held on those motions on October 7, 1980, and

afier listening to those arguments the reorganization court

Stated its tentative conclusions which were later finalized by

the order dated October 15, 1980. As the court stated on

October 7, 1980:

The bill, as I now see it, amends and attempts to cure

some of the procedural problems with the Act which was

before me in an effort to remove the irreparable injury ar-

gument concerning the old Act. The new bill does not

address the basic finding of the Court that the whole pro-

gram which has been changed only cosmetically . . . was

an unconstitutional deprivation.

J.A. 202a. And as the court then added: *‘This is amended leg-

islation which attempts, but fails, to clear the underlying flaws

which caused me to find the bill unconstitutional in the first

place. It remains basically the same law with the same defects

and is subject to the same injunction.’* J.A. 203a.

On October 16, 1980, the reorganization court issued an or-

der dated October 15, 1980, and entitled ‘*Preliminary Injunc-

tion’’.’ J.A. 207a. In that order the court concluded that:

The Rock Island Act as amended and re-enacted by the

Staggers Rail Act effects an unconstitutional taking of pri-

vate property in violation of the rights of the Rock Island

estate, its creditors and shareholders which are secured

by the Fifth Amendment of the United States Constitu-

tion.

J.A. 207a.

Appellant RLEA and the Government had also argued that

the reorganization court should not preliminarily enjoin en-

forcement of Sections 106 and 110 of RITA because the SRA

amendments to RITA effectively eliminated any claim of ir-

reparable harm. £.g., J.A. 192a-93a. The court disagreed and

concluded that the statutory scheme could not be imple-

mented without causing ‘irreparable injury to the administra-

’By an order dated October 16, 1980, the reorganization court

modified its October 15th dated order to read that the court was con-

tinuing the June 9th injunction in effect rather than issuing a new in-

junction. J.A. 209a.

tion of the estate for the benefit of the creditors.’ J.A. 207a.

As the court explained:

The trustee is currently liquidating assets and preparing

the plan for distribution to creditors. Under court order,

the trustee is also preparing an interim plan for the im-

mediate partial satisfaction of cost of administration

claims. The imposition of a $75,000,000 uncertainty on

the estate will totally halt the liquidation for the long

period consumed by the appellate process, with irrepara-

ble injury to the already long-suffering creditors. Further,

the whole liquidation plan will be distorted by the brood-

ing omnipresence of a potential liability representing a

significant percentage of the total assets.

J.A. 207a. The Court then issued the same form of injunctive

order as it had issued on June 9th, and on October 16, 1980,

appellant RLEA filed a notice of appeal to the Seventh Circuit

pursuant to Section 124(a)(1) of RITA, as added by the SRA.

J.A. 12a. The Government also took an appeal to the Seventh

Circuit from that order on October 29, 1980. J.A. 13a.

RLEA’s and the Government's appeals were consolidated

and were heard en banc on November 13, 1980. On December

16, 1980, the Court of Appeals issued an order affirming the

order of the reorganization court by an equally divided court.*

J.A. 210a. Because two Judges disqualified themselves, only

six judges heard the appeal; three of the Judges who heard the

appeals voted to reverse’ and three of the Judges voted to af-

firm.'’ No opinions were filed with that short order. This ap-

peal has followed.

* Appellees Trustee, creditors and shareholders moved to dismiss

RLEA's appeal due to jack of jurisdiction in light of 28 U.S.C. § 1252

and RLEA'’s appeal to this Court in No. 80-415. The court concluded

that in view of the Staggers Rail Act the motion to dismiss the appeal

should be denied. J.A. 21 la. See also, Gibbons v. RLEA, Sup. Ct. No.

80-704.

* Chief Judge Fairchild and Judges Sprecher and Cudahy voted to

reverse.

Judges Swygert, Bauer and Wood voted to affirm.

SUMMARY OF ARGUMENTS

I. While 28 U.S.C. $1252 gives this Court jurisdiction over

appellant RLEA’s appeals from two interlocutory orders

which enjoined, on constitutional grounds, the implementa-

tion of the employee protection program established by

RITA, not all of the constitutional issues considered by the

courts below were properly before those courts or are prop-

erly before this Court. Appellant’s appeal in No. 80-415

from the preliminary injunction issued in June 1980 is now

moot because a decision on the validity of that order wi!l not

affect the positions of the adversary parties. It is the subse-

quent amendments to the statutes at issue, and the subse-

quent injunctive order which will determine whether those

sections are to be enforced. E.g., United States v. Alaska S.S.

Co., 253 U.S. 113 (1920). Appellants’ appeal in No. 80-1239

from the second injunctive order places before this Court in a

“clean-cut and concrete form” the constitutional issue of

whether the availability of a Tucker Act remedy obviates a

finding that Sections 106 and 110 of RITA, as amended, can

effect an uncompensated taking since, at the time of the taking,

adequate provision for compensation must be present. Dames

& Moore v. Regan, Sup. Ct. No. 80-2078, decided July 2,

1981; Regional Rail Reorganization Act Cases, 419 U.S. 102

(1974). The issue on which the courts below enjoined this Act

of Congress, however, was not justiciable when the lower

courts passed on that question, and is still non-justiciable

since the question as posed by the Rock Island appellees, as to

whether Section 106 and 110 of RITA are regulations which

have become takings, involves an ad hoc, factual inquiry

which is best resolved on a claim for compensation when the

facts are fully developed after the empioyee protection pro-

gram has been implemented. Hodel v. Virginia Surface Mining

& Reclamation Assoc., Inc., Sup. Ct. No. 79-1538, decided

June 15, 1981; Coffman v. Breeze Corporations, Inc., 323 U.S.

316 (1945).

ll. A. Congress, the ultimate arbiter of the public interest,

has twice declared that the immediate implementation of

RITA’s employee protective program was essential to con-

tinued rail service for a substantial region of our country, but

nevertheless, the courts below enjoined the implementation

of that program because, in their view, the statute was un-

constitutional in that it took private property for a public pur-

pose. That conclusion, appellant RLEA submits, was

erroneous because it failed to recognize that the Fifth Amend-

ment to the Constitution prohibits only uncompensated tak-

ings; so long as Congress has provided a reasonable, certain

and adequate means to obtain just compensation, an asserted

taking is not unconstitutional. Regional Rail Reorganization Act

Cases, supra. Here, Congress has provided through the

Tucker Act, 28 U.S.C. §§1346(a), 1491, a reasonable, certain

and adequate means to obtain compensation, and thus, Sec-

tions 106 and 110 can neither be declared invalid nor enjoined

as effecting an unconstitutional taking of property. Hurley v.

Kincaid, 285 U.S. 95 (1932).

B. Since the Tucker Act provides the compensation re-

quired, if the statute is eventually found to have effected a

taking of private property, the injunction at bar should be set

aside without any further inquiry into the taking question.

However, if the issue of a taking is examined, it becomes ap-

parent that Section 106 of RITA does not affect a taking of pri-

vate property. Congress, as an exercise of its powers under the

Commerce Clause (Act I, § 8, cl.3) has a clear right to allocate

the economic burdens of life between a railroad and its em-

ployees. United States v. Lowden, 308 U.S. 225 (1939). Such

an allocation, moreover, is not a taking in this case because by

investing in a railroad, the creditors and investors have as-

sumed the risk that Congress would insist that the object of

their investment—the Rock Island estate—honor its obliga-

tions to assist its unemployed work force. Accord, Reconstruc-

tion Finance Corp. v. Denver & R.G.W.R., 328 U.S. 495

(1946).

ARGUMENTS

I. The Issue Of The Validity Of The Preliminary Injunction

Enjoining The Implementation Of An Act Of Congress On

Constitutional Grounds Is Properly Before This Court

Since That Preliminary Injunction Presents A Concrete

Controversy Involving The Application Of The Fifth

Amendment To Sections 106 and 110 Of RITA, As

Modified By The SRA.

In its order of April 27, 1981, noting probable jurisdiction in

No. 80-1239, this Court asked the parties to address the issue

of whether the constitutionality of Sections 106 and 110 of

RITA, as modified by the SRA, 45 U.S.C. §§ 1005, 1008, is

properly before this Court. Appellant RLEA respectfully sub-

mits that the issue of whether Sections 106 and 110 of RITA,

as modified, effect an uncompensated taking of private property

for public purposes is properly before this Court since the CRI

reorganization court, and then the court of appeals by affirm-

ing the interlocutory injunction, relied upon the Taking

Clause of the Fifth Amendment to the United States Con-

stitution'' to enjoin the implementation of that Act of Con-

gress. However, appellant respectfully submits that the

underlying constitutional issue of whether those sections

effect a taking of property within the meaning of the Fifth

Amendment is not ripe for adjudication since that question is

premature and is not presently presented in a ‘‘clean-cut and

concrete form ....’’ Rescue Army v. Municipal Court, 331

U.S. 549, 584 (1947).

''The Taking Clause provides as follows: ‘‘[Nlor shall private

property be taken for public use without just compensation.”’

2 Appellant RLEA respectfully submits that its appeal in No. 80-

415 no longer presents a justiciable issue for that appeal has been

rendered moot by the passage of the SRA amendments to Sections

106 and 110 of RITA. It is axiomatic that a reviewing court must ex-

amine the validity of an injunctive order in the light of the law as it

stands when that injunction is reviewed, not as it stood when the in-

junction was issued. Diffenderfer v. Central Baptist Church, 404 U.S.

412, 414 (1972); Bryan v. Austin, 354 U.S. 933 (1957). Where the

When Congress enacted RITA in May 1980, it did so with

the expressed intention that the employee protective features

of that Act should be implemented immediately ‘‘so that pay-

ments to Rock Island employees will be made forthwith, not-

withstanding any ensuing litigation concerning such pay-

ments.’’ H. Rpt. No. 96-1041, 96th Cong., 2d Sess. at 26

(1980). That intent, however, was not honored, because, act-

ing upon the Rock Island appellees’ request for interlocutory

injunctive relief, the CRI reorganization court concluded on

June 9, 1980, that Sections 106 and 110, if implemented,

would effect ‘‘an unconstitutional taking, an unconstitutional

deprivation of the property rights of the creditors.’’ J.A. 154a.

After noting that the probability of a reaffirmation of the ‘‘un-

constitutionality of this Act after more mature consideration

and deliberations is exceedingly great’’ (J.A. 156a), the

reorganization court decided that a balancing of the equities

required the intrusion of the court into the “implementation

of this statutory program on constitutional grounds.”’ J.A.

154a.

Appellee United States had argued that it was premature to

rule on the constitutionality of Section 106 since the ICC had

amended law materially affects the rationale for the issuance of the

injunction in the first place, it can nullify the justiciability of an ap-

peal. Hall v. Beals, 396 U.S. 45, 48 (1969). Moreover, where the

subsequent law is itself the new source of the dispute between the

parties, a decision on the prior law will not affect the rights of the par-

ties, and thus, an appeal from an injunction under the prior law is,

without more, moot. E.g., United States v. Alaska S.S. Co., 253 U.S.

113, 115-17 (1920). That is the situation presented by appellant's ap-

peal in No. 80-415, for the SRA amendments and the issues present-

ed in No. 80-1239 will determine whether Section 106 can be imple-

mented as Congress has directed; the injunction in No. 80-415 is

now of academic interest only. Consequently, appellant respectfully

submits, this Court should note probable jurisdiction over appel-

lant’s appeal in No. 80-415, and should vacate the June 9th inter-

locutory order of the reorganization court. University of Tex. v.

Camenisch, Sup. Ct. No. 80-317, decided April 29, 1981.

not yet established the limit of the Trustee's potential obliga-

tion under that section. J.A. 144a-45a. That argument was

rejected by the reorganization court which stated:

It [the plan eventually oe peo by the ICC] might

even be much less than the $75 million, it might be $50

million or $25 million. The issues [sic] is not whether the

1.C.C. can arrive at a labor protection plan which the cred-

itors and the Trustee could live with, even if that plan

were to cost the Estate only $1 million. The issue is

whether ab initio, the concept of a compelled labor pro-

tection plan, paid for out of the Estate, whatever the plan,

has any constitutional sanction. We don’t have to wait for

an 1.C.C. determination of the details of the plan to deter-

mine that issue.

J.A. 155a. The court then addressed that issue, and stated

that:

One of the central issues in this case is and always has

been and will be and will continue to be to what extent

the private sector, here the creditors and the bondhold-

ers, can be saddled with the public interest. Congress may

determine public interest, but Congress may not take pri-

vate property to serve the public interest.

J.A. 156a. Those conclusions were reiterated by the CRI

reorganization court on June 20, 1981, when it denied appel-

lant’s and the federal appellees’ motions to reconsider its ear-

lier ruling. J.A. 180a.

After appellant and the government were unsuccessful in

obtaining a stay of the June 1980 preliminary injunction

(RLEA vy. Gibbons, 448 U.S. 909 (1980)), Congress once

again passed legislation on this subject, and it once again spe-

cifically expressed its intention that ‘“‘the benefits and al-

lowances [under Section 106 of RITA, as modified, should]

... immediately become available to the qualifying Rock Is-

land employees and the Trustee [could] . . . pursue his allega-

tions of unconstitutional action under the Tucker Act [28

U.S.C. $$ 1346(a), 1491].”’ H. Rpt. No. 96-1430, 96th Cong.,

2d Sess. at 138 (1980). But once again Congress’ intent was

blocked by the CRI reorganization court, and then by the

court of appeals, because, as the reorganization court held in

its October order:

The Rock Island Act as amended and re-enacted by the

Staggers Rail Act effects an unconstitutional taking of pri-

vate property in violation of the rights of the Rock Island

estate, its creditors and shareholders which are secured

by the Fifth Amendment of the United States Constitu-

tion.

J.A. 207a. The impact of the availability of a Tucker Act rem-

edy on that conclusion, however, was not addressed by the

lower courts even though appellant had argued that Congress’

specific reference to the Tucker Act satisfied the compensa-

tion portion of the Fifth Amendment’s Taking Clause. 7th

Cir. No. 80-2487, Brief for Appellant at 32-35.

Since the October 1980 injunctive order and its affirmance

by the court of appeals involve an ‘‘interlocutory .. . order

... holding an Act of Congress unconstitutional in [a] .. .

civil . . . proceeding to which the United States or any of its

agencies, or any officer . . . is a party’’ (28 U.S.C. § 1252), this

Court clearly has the jurisdiction to consider appellant’s ap-

peal in No. 80-1239. Accord, Parker v. Levy, 417 U.S. 733

(1974). Indeed, no party to this proceeding has disputed this

Court's jurisdiction over this appeal. But while that jurisdic-

tion may technically be present, its exercise over constitu-

tional issues may be inappropriate if problems such as ‘‘pre-

maturity and abstractness’’ present insuperable obstacles to

its effective exercise. E.g., Socialist Labor Party v. Gilligan, 406

U.S. 583, 588 (1972). Appellant RLEA respectfully submits

that no such problems make the exercise of that jurisdiction

inappropriate over the constitutional issue of compensation

which is presented by No. 80-1239. E.g., Dames & Moore v.

Regan, Sup. Ct. No. 80-2078, decided July 2, 1981, slip op. at

31; Regional Rail Reorganization Act Cases (hereinafter, “Rail

Act Cases"’}, 419 U.S. 102, 145-46. (1974). However the same

is not true for the underlying issue of the taking itself.

Appellant RLEA respectfully submits that this appeal places

before this Court in a clean-cut and concrete form the con-

stitutional issue of whether Congress’ addition of Section 124

Act, obviates the conclusion that Sections 106 and 110 of

RITA, as thus modified by Section 701 of the SRA, could

effect an uncompensated taking of property. Implementation of

Sections 106 and 110 of RITA were enjoined, over appellant's

objections, because the courts below believed that those pro-

visions constituted a taking of private property for public use.

However, if at the time of the taking there is a ‘‘reasonable,

certain and adequate provision for obtaining compensation”

(Cherokee Nation v. Southern Kansas Ry., 135 U.S. 641, 659

(1890)), the taking is not in violation of the Taking Clause of

the Fifth Amendment. Rail Act Cases, supra, 419 U.S. at 124-

27. Since all of the facts material to determining whether the

Tucker Act remedy satisfies the just compensation portion of

the Taking Clause, are developed as fully as can be at this

stage of the implementation of Sections 106 and 110 of RITA,

as modified, and since the implementation of those provisions

is being enjoined because of the Taking Clause, it cannot be

contended that this case presents the compensation issue in a

non-justiciable, abstract manner. E.g., Dames & Moore v.

Regan, supra, slip op. at 30-31, accord, Duke Power Co. v. Car-

olina Environmental Study Group, Inc., 438 U.S. 59, 94 0.39

(1978). An expedited trial on the merits of the Rock Island

appellees’ complaint (see, Rule 65(a)(2), Fed. R. Civ. P.),

would not have shed any additional light on this question

since a more developed factual record must await the actual

implementation of the program—an event which will not

occur until the bar of this injunction is removed. Accord, Agins

v. City of Tiburon, 447 U.S. 255, 260 (1980). Moreove-, it is

clear that appellant's appeal is not premature, since a program

which Congress has twice mandated should be implemented

speedily has now been delayed for more than a year because of

the controversy over the issue of compensation.

However, the conclusion that the compensation issue is

properly before this Court in No. 80-1239, does not necessari-

ly mean that the subsidiary issue whether Sections 106 and

110 of RITA constitute a taking of property, is also properly

before this Court at this time. Rail Act Cases, supra, 419 U.S.

at 145-46. Appellant RLEA respectfully submits that the tak-

ing issue is not properly before this Court, and a fortiori was

improperly passed upon by the courts below, for several

reasons. First, if as appellant asserts the Tucker Act provides

the compensation required by the Fifth Amendment, it is pre-

mature to consider whether a taking has occurred until a re-

quest for compensation is presented. No such request has

been made here. Second, the underlying question of a taking

as posed by the Rock Island appellees is still an abstract issue.

The Rock Isiand appellees assert that Section 106 of RITA

is a regulation which has gone too far, but when a regulation

becomes a taking is a question for which ‘“‘this Court, quite

simply, has been unable to develop any ‘set formula’ for

determining... .’’ Penn Central Transp. Co. v. New York City,

438 U.S. 104, 124 (1978). That determination ultimately in-

volves ‘‘essentially ad hoc, factual inquiries’’ which include an

examination of, among other factors, the degree of the intru-

sion of the regulation into the claimant’s property interest. /d.;

see also, San Diego Gas & Electric Co. v. City of San Diego, Sup.

Ct. No. 79-678, decided March 24, 1981 (Brennan, J., dissent-

ing), slip op. at 12-17. Such a detailed inquiry, appellant

RLEA respectfully submits, involves more than a facial con-

Stitutional inquiry, and could not have validly been made in

the case at bar until after the employee protection program has

been implemented and the question of ultimate liability for

that program becomes justiciable.

Section 106 of RITA, as amended, provides that if the par-

ties are unable to reach an agreement on a protective formula,

the ICC

shall impose upon the parties by appropriate order a fair

and equitable arrangement with respect to employee pro-

tection .... For purposes of this subsection, the term

“‘fair and equitable’’ means no less protective of the in-

terests of employees than protection afforded under

[Section 9 of the MRRA, 45 U.S.C. § 908] . . . , subject to

the limitations set forth in section 110 of this title.

45 U.S.C. $§ 1005(b). Section 110(d) of RITA provided that

the total liability of the Rock Island for benefits and al-

lowances under Section 106 could ‘‘not exceed $75,000,000.”’

45 U.S.C. $ 1008(d). Moreover, Section 106(e)(2) of the Act,

45 U.S.C. §1005(e)(2) (emphasis added), provided that the

Rock Island should pay such benefits or allowances either

from its own assets ‘‘or in accordance with”’ Section 110 of the

Act. Section 110(a), 45 U.S.C. § 1008(a) (emphasis added),

provided that the Secretary of Transportation, upon request,

**shall guarantee obligations of the Rock Island Railroad for

purposes of providing employee protection in accordance

with”’ Section 106. See, 12 U.S.C. § 2285. In short, Congress

has provided in Sections 106 and 110 of RITA, a compact pro-

gram designed to provide needed funds to employees, and

yet, at the same time, not deplete the cash reserves of the

estate.

While appellant RLEA respectfully submits that the facts of

this case are sufficient to show at this time that Sections 106

and 110 of RITA survive a mere facial challenge to their con-

stitutionality since they do not affront on their face the Due

Process Clause of the Fifth Amendment (e.g., United States v.

Lowden, 308 U.S. 225, 240 (1939)), a contrary determination

(i.e., that a regulation has become a taking) must await: (a)

the promulgation of the arrangement, (b) its implementation,

refusal to reimburse the government." It will only be after

‘It should also be noted that the Indenture Trustees and the

shareholders do not have standing to make a facial challenge on a

Taking Clause basis for the following reasons. First, the secured

bondholders have not shown that their security interest is insuffi-

cient to satisfy the estate’s debt towards them. Consequently, their

attack on statute is, at best, premature. See, Warth v. Seldin, 422 U.S.

490, 498-99 (1975). Second, the shareholders and the general credi-

tors do not have a property interest directly affected by the enact-

ment of the Section 106 obligation; their interest is only secondary in

that the satisfaction of that obligation makes an ultimate satisfaction

of their intangible interests more remote. Such indirect interests are

mt property rights protected by the Taking Clause. Louisville & N.R.

v. Mottley, 219 U.S. 467, 484 (1911); accord, Duke Power Co. v. Car-

olina Env. Study Group, supra, 438 U.S. at 88 n.32.

those events have occurred that the true costs of the program

in relation to the entire estate’s worth will be known. And it

will only be at that time that the issue of a taking can be

adjudicated in either a suit by the Trustee under the Tucker

Act, 28 U.S.C. § 1491, to recover funds expended, or on a

contention by the Government in the reorganization proceed-

ing itself that its claim under Section 110 of RITA has been

improperly subordinated to that of the shareholders. Until the

program is implemented, the Rock Island appellees’ claims of

a taking are premature, and thus, non-justiciable. £.g., Hodel

v. Virginia Surface Mining & Reclamation Assoc., Inc., Sup. Ct.

No. 79-1538, decided June 15, 1981, slip op. at 26-31.

This conclusion is supported by this Court’s decision in

Coffman v. Breeze Corporations, Inc., 323 U.S. 316 (1945), in

which the Court concluded that a complainant did not present

a justiciable issue when he sought to enjoin enforcement of,

and to have declared unconstitutional, an Act of Congress.

Coffman involved a suit by a patent owner against his licensees

to enjoin their paying accrued royalties to the Government

under the Royalty Adjustment Act of 1942, '* and to have that

Act declared unconstitutional. The lower courts had con-

cluded that the suit should be dismissed for lack of equity

jurisdiction and for want of a justiciable case or controversy;

this Court affirmed. As the Court stated in explaining its rul-

ing:

So far as the present suit seeks a declaratory judgment or

an injunction restraining payment of the royalties into the

Treasury, it raises no justiciable issue. Appellant asserts

in the present suit no right to recover the royalties. It asks

only a determination that the Royalty Adjustment Act is

unconstitutional and, if so found, that compliance with

the Act be enjoined . . . . If contested, the validity of the

Act would be an issue which, so far as it could ever be-

come material, would properly arise only in a suit to

456 Stat. 1013 (1942). That Act applied to government contracts

and provided that the licensor must sue the United States to recover

any reduced royalty payments which are claimed to be owed.

recover the royaltics where it could be appropriatcly de-

cided.

323 U.S. at 323-24. That case, appellant RLEA respecifully

submits, is analogous to the case at bar.

As in Coffman, the Rock Island appellees are seeking to pre-

vent an Act of Congress from being implemented. They are

not, in reality, seeking to prevent any monies from being

taken initially from the estate, but rather, are objecting to the

estate's being required to borrow funds to comply with the

statute, for it may subsequently be decided that such borrow-

ings were unlawful. But, as in Coffman, that issue is more

properly raised when either the government seeks to enforce

iis loan guarantee under Section 110 if RITA, or the

shareholders, or the creditors if the assets otherwise available

prove inadequate, bring an action against the Government

under the Tucker Act to recover. Until the issue is joined in

such a manner, a justiciable case or controversy has not been

presented, and just as this Court should not address the con-

stitutional issue of a taking at this time, an injunction to re-

strain enforcement of the Act, on that ground, was improper.

Coffman vy. Breeze Corporation, Inc., supra.

Il. The Courts Below Improperly Enjoined On Fifth Amend-

ment Grounds An Act of Congress, Which Congress Has

Twice Declared To Be Essential To Rail Transportation,

Since By Providing A Tucker Act Remedy To The Rock

Island Estate, Congress Has Precluded A Finding That

The Act Could Effect An Uncompensated Taking Of Prop-

erty

Convinced that Congress had no right to require the Rock

Island estate to aid its unemployed work force, the CRI

reorganization court ruled that the statutory scheme twice

devised by Congress should not be permitted to be imple-

mented because, in the court’s opinion, that program (not-

withstanding the availability of a Tucker Act remedy).

effected an unconstitutional taking of private property for

public purposes. To prevent its implementation, the

reorganization court exercised its equity powers and

preliminarily enjoined the enforcement of that Act even

though Congress had twice declared that it intended its em-

ployee protective program to be implemented forthwith, not-

withstanding any litigation over its validity, and that it con-

sidered its legislative program to be essential to the continua-

tion of rail service to a substantial region of our country. Ap-

pellant RLEA respectfully submits that the reorganization

court, and then the court of appeals by affirming that injunc-

tion, have abused their discretion, for they have completely

frustrated the intent of Congress based upon a claim of an un-

constitutional taking of property despite Corigress’ provision

of compensation as required by the Fifth Amendment.

It is well settled that a request for an interlocutory injunc-

tion, such as that made by the Rock Island appellees in the

cases at bar, is addressed to the discretionary and equitable

powers of a court. E.g., Virginia Petroleum Jobbers Assoc. v.

FPC, 259 F.2d 921 (D.C. Cir. 1958). Those discretionary

powers, however, are neither ‘‘unfettered by meaningful

standards [nor] ... shielded from thorough appellate re-

view.’’ Albemarle Paper Co. v. Moody, 422 U.S. 405, 416

(1975). Rather, the courts have developed over the years a

precise standard which requires a balancing of the equities in-

volved with the probability for success on the merits. E£.g.,

American Medical Assoc. v. Weinberger, 522 F.2d 921 (7th Cir.

1975). Moreover, when the moving party is attempting to

enjoin an Act of Congress, the separation of powers doctrine

(see, Goldwater v. Carter, 444 U.S. 996 (1979)) mandates that

the Act be examined with a “‘presumption of constitu-

tionality’’ and that the “‘burden’’ of upsetting that presump-

tion be placed upon the party attacking its constitutionality.

Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976).

When those principles are applied to the injunction in No. 80-

1239, it becomes apparent that the courts below have

improperly enjoined the implementation of Sections 106 and

110 of RITA, as amended by the SRA.

A. By expressly providing that nothing in RITA shall limit

the right of any person to commence an action under the

Tucker Act, Congress precluded the finding that Sections

106 and 110 of RITA could effect an uncompensated taking

of property

When the CRI reorganization court's rulings are examined

to ascertain the precise basis for its decision to enjoin the im-

plementation of Sections 106 and 110 of RITA, even as

amended, it becomes apparent that the lower court enjoined

the employee protective features of RITA because it did not

accept the argument that Congress can, consistently with the

Fifth Amendment, take property and provide the compensa-

tion required by that amendment through a subsequent

Tucker Act suit. As the court explained:

The argument that the Tucker Act is available and

therefore we could go ahead with the unconstitutional

taking because the Tucker Act will allow everything to

turn out in the end really does not impress me. | share

[counsel’s] .. . comment, or argument, that you do not

proceed, nor must the court allow proceedings under

what is patently unconstitutional legislation because there

is a remedy somewhere down the line that may straighten

things out.

J.A. 202a-03a. In other words, the reorganization court

enjoined implementation of Sections 106 and 110 of RITA, as

amended, because it concluded that the Fifth Amendment re-

quires the government to compensate an owner of property

before it takes private property. Appellant RLEA respectfully

submits that such a conclusion was error, for it is well settled

that the Fifth Amendment ‘‘does not entitle [a property

owner] to be paid in advance of the taking.’’ Hurley v. Kin-

caid, 285 U.S. 95, 104 (1932).

Cited as one of the fundamental principles of common law

(3 Story, COMMENTARIES ON THE CONSTITUTION OF THE UNITED

States $1784 (1833)), the Fifth Amendment Taking Clause’s

protections are ‘‘designed to bar Government from forcing

some people alone to bear public burdens which, in all fair-

ness and justice, should be borne by the public as a whole.”

Armstrong v. United States, 364 U.S. 40, 49 (1960). To achieve

the purpose of the Taking Clause, however, the government

need not actually pay just compensation before a taking can

occur, it is sufficient that at the time of taking the government

has provided to the property owner a ‘‘reasonable, certain and

adequate [means] to secure the just compensation ... .”’

Cherokee Nation v. Southern Kansas Ry., supra, \35 U.S. at

659; accord, Sweet v. Rechel, 159 U.S. 380, 400-01 (1895). The

Tucker Act remedy, 28 U.S.C. $81346(a), 1491, has been held

by this Court on many occasions to provide the just compen-

sation required by the Taking Clause. E.g., Dames & Moore v.

Regan, supra, slip op. at 30-31; Rail Act Cases, supra, 419 U.S.

at 125-27; accord, Duke Power Co. v. Carolina Environmental

Study Group Inc., supra, 438 U.S. at 94 0.39.

Prior to the passage of the Tucker Act in 1887, 24 Stat. 505,

claims against the government could only be redressed by a

petition to Congress because of sovereign immunity. Re-

marks of Rep. Springer, 18 Cong. Rec. 2680 (March 3, 1887).

To avoid spending unnecessary time on matters which were

more appropriately considered by a court of justice, and in or-

der to follow the trend of that time of permitting suits against

governments (see, H. Rpt. No. 1077, 49th Cong., Ist Sess. at

1, 3 (1886)), Congress enacted a bill to authorize ‘Suits

Against the Government,”’ which has since become known as

the Tucker Act. By a provision in that Act, Congress ex-

panded the jurisdiction of the Court of Claims by ‘‘en-

grafting’’ upon its prior jurisdiction the power to hear

***[c}laims founded upon the Constitution of the United

States,’ such as for just compensation for property taken for

public use, &c.”’ H. Rpt. No. 1077, supra, at 4. That jurisdic-

lion still exists today, and as Congress provided in its SRA

amendments to RITA, nothing in RITA should be read as

withdrawing that remedy. 45 U.S.C. $1018(c), as amended.

When Congress, in the exercise of its powers under the

Commerce Clause of the Constitution (Act. 1, 8, cl. 3),

imposes a regulation designed to promote interstate com-

merce, that regulation, by definition, involves the adjustment

of rights for the public good. Andrus v. Allard, 444 U.S. 51, 65

(1979). Since government need not regulate by ‘‘purchase”

(/d.), Congress has the power to adjust the burdens and bene-

fits of economic life (e.g.. Usery v. Turner Elkhorn Mining Co.,

supra, 428 U.S. at 15-16), *‘subject only to the dictates” of jus-

tice and fairness. Andrus v. Allard, supra, 444 U.S. at 65. When

Congress exceeds the bounds of permissible regulation, and

by regulation effects a taking of property, the Taking Clause

guarantees takeover and provide a cause of action to the af-

fected property owner to obtain ‘“‘just compensation” either

on a claim founded upon the Constitution within the meaning

of the Tucker Act’s grant of jurisdiction to the Court of

Claims, or based upon an implied promise to pay compensa-

tion, also within the jurisdiction of the Court of Claims. Rail

Act Cases, supra, 419 U.S. at 126-27 (and cases cited therein).

Since the Tucker Act provides the means to obtain compensa-

tion, the assailed action is neither unconstitutional nor enjoin-

able as causing an uncompensated taking. E.g., Dames &

Moore v. Regan, supra, Hurley v. Kincaid, supra.

In Hurley v. Kincaid, supra, this Court addressed the ques-

tion of whether an injunction could issue to enjoin a taking by

the government without prior compensation in asserted viola-

tion of the Fifth Amendment. The Court answered the ques-

lion in the negative stating:

For even if the defendants are acting illegally, under the

Act, in threatening to proceed without first acquiring

flowage rights over the complainant's lands, the illegality

.. . is confined to the failure to compensate him for the

taking, and affords no basis for an injunction if such com-

pensation may be procured in an action at law. The Sth

Amendment does not entitle him to be paid in advance of

the taking.

285 U.S. at 104 (footnote omitted). The injunction in that case

was set aside because the Court concluded that ‘the com-

plainant has a plain, adequate and complete remedy at law’ —

i.e., the Tucker Act. /d. at 105. That holding, appellant RLEA

submits, is applicable and is controlling in the case sub judice

for like Kincaid, the estate has a remedy at law—the Tucker

Act—to recover if a taking is subsequently found to have

occurred.

When Hurley is applied to the injunction sub judice, it be-

comes apparent that the courts below improperly enjoined the

implementation of Sections 106 and 110 of RITA, as

amended. If, as the courts below concluded, Section 106 is a

regulation which has become a taking, then Congress has

impliedly promised to pay just compensation to the estate. 45

U.S.C. $1018(c). That implied promise makes the taking con-

stitutional. Sections 106 and 110, therefore, are not enjoinable

as effecting an uncompensated taking.

The Rock Island appellees’ and the lower courts’ concern

with such a view of the compensation aspects of the Taking

Clause is that it affronts their notions of fairness to permit the

government to take private property and then say ‘“‘sue me”

to obtain the compensation due. J.A. 201a. Even in a situation

where there is no justification for the government's refusal to

accept a complainant's assertion that the assailed action is a

taking, such a haughty attitude on the government’s part does

not make the assailed taking unconstitutional because the pro-

vision for compensation in the Tucker Act satisfies the guar-

antees of the Taking Clause. E.g., Stringer v. United States, 471

F.2d 381, 383-84 (Sth Cir. 1973). However, in the case at bar

it cannot be contended that the government’s action is “‘high-

handed,”’ for Congress reasonably and, appellant RLEA sub-

mits, correctly believed that the Rock Island estate has an ob-

ligation to protect its unemployed workers. Congress has in- .

sisted in RITA that the estate honor that obligation, but Con-

gress has also provided in that Act an implied promise to pay

just compensation if its view of the Rock Island’s obligations

is not sustained by the judiciary. Surely such an attitude is

neither unreasonable nor high-handed; but more importantly,

it is not in excess of Congress’ powers nor in contravention of

the guarantees of the Taking Clause.

B. Section 106 of RITA is not a regulation which, on its face,

has become a taking of private property, for by investing in

a railroad the Rock Island creditors and shareholders have

assumed the risk that their interests will be subordinated

to the interests of the public in protecting unemployed

Rock Island employees

As shown by Argument I, supra, the validity of the taking

was not properly before the lower courts, and is not before

this Court, because it is premature and abstract at this time.

Moreover, the availability of the Tucker Act remedy, as

shown by Argument II (B), supra, makes a consideration of

this issue inappropriate at this time. See, Duke Power Co. v.

Carolina Environmental Study Group Inc., supra, 438 U.S. at 94

n.39. However, if this Court concludes that the taking issue is

properly reviewable, appellant RLEA respectfully submits

that the record in the cases at bar shows that the courts below

improperly concluded that the Rock Island appellees stand a

substantial chance of succeeding on the merits of their attack

on the constitutionality of Sections 106 and 110 of RITA, as

amended. Moreover, when the merits of the CRI appellees’

arguments are balanced against the equities in this case, par-

ticularly with the public interest factors, it becomes apparent

that the lower courts abused their discretion in enjoining the

employee protection program of RITA.

Through its consideration of the injunctions sub judice, the

CRI reorganization court asserted that its earlier conclusion

that the Rock Island was no longer reorganizable (see, Sup. Ct.

No. 80-1899) meant that, as a non-operating railroad, the

Rock Island was no longer suffused with the public interest;

the Rock Island had become simply ‘‘a private business with a

lot of creditors which own some property and which is being

liquidated for the benefit of creditors . . . ."’ J.A. 180a. Since

the Rock Island estate was now private property, Congress,

according to the reorganization court, could no longer look to

the estate to “‘fund a legislatively created special benefits pro-

gram” for unemployed Rock Island employees. J.A. 180a; see

also, 153a, 155a. That view of the Act’s validity was not

dependent upon the degree of the intrusion into the estate's

assets (J.A. 155a), but rather, was premised upon the simple

assertion that ‘‘Congress may not take private property to

serve the public interest’’ (J.A. 156a), regardless of the

amount appropriated or the reason for its expropriation. Ap-

pellant RLEA respectfully submits that the CRI reorganiza-

tion improperly viewed the nature of the Rock Island estate

and its relation to the public interest, and that once that rela-

tionship is viewed in its proper perspective, the injunction at

bar becomes improvidently issued.

Congress* powers under the Commerce Clause of the Con-

stitution are extensive and, indeed, have been stated to be

plenary. E.g., NRLB v. Fainblatt, 306 U.S. 601,606 (1939),

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824). When Con-

gress exercises that power and prescribes regulations which

adjust ‘‘the burdens and benefits of economic life,”’ such leg-

islative acts carry with them a ‘“‘presumption of constitu-

tionality,’’ especially where Congress, as in the cases at bar,

allocates ‘‘the interlocking economic rights and duties of em-

ployers and employees upon workmen's compensation princi-

ples... .°’ Usery v. Turner Elkhorn Mining Co., supra, 428

U.S. at 15. Moreover:

A court may invalidate legislation enacted under the

Commerce Clause only if it is clear that there is no

rational basis for a congressional finding that the regula-

ted activity affects interstate commerce, or that there is

no reasonable connection between the regulatory means

selected and the asserted ends

Hodel v. Indiana, Sup. Ct. No. 80-231, decided June 15, 1981,

slip op. at 7. Section 106 of RITA clearly has a rational basis

and connection, for this Court has so held in other cases in-

volving comparable employee protective provisions. E.x.,

United States v. Lowden, supra, 308 U.S. at 240, ICC v. Rail-

way Labor Executors’ Assoc., 315 U.S. 373 (1942).

It has long been recognized that the railroad employee is an

important, and indeed essential component of our national

rail transportation system. Since the passage of the Emergency

Railroad Transportation Act of 1933, 48 Stat. 211, Congress

has attempted to shield railroad employees from bearing the

full burden of the economies which railroads could achieve in

modifying their rail systems by requiring railroads to share ihe

burden of the adverse consequences.'* E.g., Emergency Rail-

road Transportation Act of 1933, §7, 48 Stat. 218; 49 U.S.C.

$10903(b)(2); SRA $227, 94 Stat. 1931 (amending 11 U.S.C.

$1170, 1172(b)). It is now well settled that what the ICC said

in St. Paul Bridge & Terminal Ry. — Control, 199 1.C.C. 588, 595

(1934), is equally true today, and supplies both the rational

basis and the rational connection to shelter Section 106 from a

due process attack:

There is no definition here [in the predecessor provision

to $11344] of the public interest. The language is broad

enough to comprehend every public interest and the in-

terest of every group or element of the public. . . . Since

employees of railway companies are important elements

of the railway transportation industry and of the com-

munities in which railways operate, their interest in

changes in management, ownership, or operation of the

companies by which they are employed is manifest.

As this Court explained in United States v. Lowden, supra, 308

U.S. at 235-36:

The now extensive history of legislation regulating the

relations of railroad employees and employers plainly evi-

dences the awareness of Congress that just and reasona-

ble treatment of railroad employees is not only an essen-

tial aid to the maintenance of a service uninterrupted by

labor disputes, but that it promotes efficiency, which

suffers through loss of employee morale when the

demands of justice are ignored.

Even when protective conditions are imposed upon an action

taken to aid a carrier in reorganization survive, the require-

ment that a railroad provide economic protections to its em-

''Congress has evidenced a concern for railroad employees for

almost a century, beginning with the Arbitration Act of 1888 (see,

C.M.R. Rehmus, Railway Labor Act at Fifty, pp. 1-22 (GPO 1977)),

and including virtually every major act affecting railroads since 1920.

ployees, does not affront the Due Process Clause of the Filth

Amendment since ‘‘a business may be required to carry the

burden of employee wastage incident to its operation ... .”

United States v. Lowden, supra, 308 U.S. at 240 (involving eco-

nomic action of Rock Island predecessor while in reorganiza-

tion).

Considerations involving employee interests, consequent-

ly, have been an integral part of the railroad industry for more

than a half century, and any investor who has invested in that

industry has done so with the clear understanding that his in-

vestment was subject to those interests. Cf, Reconstruction Fi-

nance Corp. v. Denver & R.G.W.R., 328 U.S. 495 (1946). Con-

versely, workers have entered and have remained in the rail-

road industry with the clear understanding that loyal service

to that industry will not be ignored (e.g., United States v.

Lowden, supra, 308 U.S. at 234-36), and that, in exchange for

that dedication, they will enjoy a form of guaranteed job secu-

rity. E.g., 49 U.S.C. $§10903(b)(2), 11347.

In this case, thousands of Rock Island employees relied

upon those assurances and continued to work for that carrier,

even though it was in reorganization, and even though to all

but the naive its future prospects were grim. Congress was

well aware of that dedication when, in enacting the MRRA

and extending to the CRI court the power to authorize aban-

donments, it limited that power by providing that: ‘‘In au-

thorizing any abandonment pursuant to [Section 17(a)] ... ,

the court shall require the carrier to provide a fair arrange-

ment at least as protective of the interests of employees as that

required under section 11347 of title 49." 45 U.S.C. $915(a).

It was to assure that its intent in qualifying Section 17(a) of

the MRRA was honored, and that some form of immediate

protective benefits were made available to needy Rock Island

employees, that Congress enacted Section 106 of RITA. Sure-

ly, the Rock Island appellees have not shown that Congress

lacked a rational basis for concluding in Sections 102(1) and

(2) of RITA, 45 U.S.C, §1001(1), (2), that its provision of aid

for unemployed Rock Island employees was reasonably

related to rail transportation in the Rock Island region, Nor

can it be asserted that Congress erred in concluding that the

means it chose to accomplish its objectives was reasonably

related to the ends it sought to obtain.

Apparently recognizing that Section 106 is a permissible

regulation for a railroad, the Rock Island appellees and the

reorganization court argue that the statute in question is now

an impermissible regulation because the Rock Island is being

liquidated. J.A. 180a. That argument, however, ignores the

fact that the Rock Island estate will continue to be important

to the public interest for so long as it owns or possesses tracks

which are essential to or needed for rail service. Indeed, it was

to provide for an orderly transition from Rock Island opera-

tions to service by other carriers that Congress enacted RITA.

45 U.S.C. $1001. And to achieve that end, Congress con-

cluded that unemployed Rock Island employees must receive

economic protections to assure a steady and sure supply of la-

bor for all railroads. See, H.R. 7235, $227(c), 126 Cong.Rec.

H8619 (September 9, 1980); H. Rpt. No. 96-1430, supra, at

138-39. Surely, Congress’ conclusion cannot be said to be un-

reasonable, E.g., Usery v. Turner Elkhorn Mining Co., supra.

Nevertheless, the CRI reorganization court concluded that

Section 106 of RITA effected a taking because, in the court's

opinion, ‘‘justice and fairness’’ required that the public, and

not the Rock Island creditors, pay for the public good which

Congress hoped to achieve from enacting that section. J.A.

180a-8 la. However, when that assertion is examined critical-

ly, it fails because the Rock Island creditors and shareholders

have no “‘property right’’ which is being ‘‘taken’’ by Section

106. In light of certain decisions by the ICC, '* those parties

may have had a faint hope that the estate might possibly es-

E.G., Wellsville, A.& G.R.—Abandonment, 354 1.C.C, 744

(1978), but see, In re Penn Central Transp. Co., 347 1.C.C. 45, 92

(1973); H. Rpt. 96-839, supra, at 63-66 (letter from ICC General

Counsel).

cape its obligations under 49 U.S.C. §10903(b)(2) or 45

U.S.C. §915(a) to aid employees, but that expectation was not

‘sufficiently bound up with the reasonable expectations [of a

property owner] . . . to constitute ‘property’ for Fifth Amend-

ment Purposes.”’ Penn Central Transportation Co. v. New York

City, supra, 438 U.S. at 125.

Railroads are sui generis in that they are a private enterprise

suffused with the public interest. That public interest enabled

the railroads, including the Rock Island’s predecessors, to ob-

tain much of the land on which their tracks lie today. E.z.,

Speech of Rep. John A. Anderson, 18 Cong. Rec. (Appendix)

137-38 (February 28, 1887); Kansas Statutes Ann. § 66-501,

see generally, F. Wilner, Competitive Equity at 28-31 (Assoc. of

American R.R., 1981). Indeed, the railroads were able to ob-

tain their right of ways because Congress and the various

States considered railroads essential to the public interest. See,

Act of July 1, 1862, 37th Cong., 2d Sess., ch. 120, $18, 12 Stat.

497. Congress and the States nurtured the railroads and pro-

vided the necessary regulations, legislative assistance and

financial support to aid their economic survival, the Rock Is-

land and its predecessors received part of that aid. E.g., Chi-

cago, R.l. & P. Ry.—Reconstruction Loan, 184 1.C.C. 597

(1932); Loan to Chicago, R.I. & P. Ry. 65 1.C.C. 224, 371

(1920). Consequently, every mile of track and each piece of

equipment possessed by the CRI estate is impregnated with

the public interest.

While investors in a railroad ‘‘cannot be cailed upon to

sacrifice their property so that a depression-proof railroad sys-

tem might be created’’ (Reconstruction Finance Corp. v.

Denver & R.G.W. R., supra, 328 U.S. at 535; see also, Brooks-

Scanlon Co. v. Railroad Comm., 251 U.S. 396 (1920)), it is

also true that the protection of railroad creditors’ and share-

holders’ property interests ‘‘do not command Procrustean

measures.”’ Penn-Central Merger Cases, 389 U.S. 486, 511

(1968). By investing in a ralroad that owes an obligation to the

public, the creditors and shareholders in this case have ‘‘as-

sumed the risk that in any depression or any reorganization

the interests of the public would be considered as well as

theirs.”’ Reconstruction Finance corp. v. Denver & R.G.W. R.,

supra, 328 U.S. at 536, New Haven Inclusion Cases, 399 U.S.

392, 491-92 (1970).

In this case, before the CRI reorganization court ordered

the liquidation of the debtor, Congress had legislated that the

interests of employees must be considered and must be pro-

tected whenever the court authorized any abandonment of

lines or discontinuance of service. MRRA, § 17(a), 45 U.S.C.

$915(a). That obligation existed before RITA was enacted,

and while Section 106 of RITA attempted to assure that the

Rock Island estate honored its obligation to protect CRI em-

ployees, Congress also conferred a benefit upon the estate

“by reducing the potential for extremely expensive labor pro-

tection claims.’ H. Rpt. No. 96-839, supra, at 22. Since the ob-

ligation to protect employees existed as an integral part of the

investment in a regulated industry, the creditors and

shareholders cannot now assert that Section 106 is, on its face,

a regulation which has become a taking.

What was ignored by the CRI reorganization court in its

rush to protect the Rock Island creditors and investors, is the

fact that whatever jurisdiction it has over the Rock Island

estate, including the complaint in the cases at bar, comes from

Section 77 of the Bankruptcy Act. That Act requires the

reorganization court to perform a balancing feat each time it

passes On a question; it must conserve the debtor's assets for

the benefit of creditors and at the same time serve the public

interest in continued rail transportation. E.g., New Haven

‘Inclusion Cases, supra, 399 U.S. at 431; see also, 11 U.S.C.

$1165, made applicable here by Section 403(b), Pub. L. No.

95-598, 92 Stat. 2683 (1978). Consequently, when the lower

courts addressed the request by the Rock Island appellees to

enjoin the implementation of an Act which Congress has

twice declared to be essential to that public interest, the courts

should have, on the facts of these cases, deferred to the will of

Congress, for as this Court has observed before:

When the public interest, as distinguished from private,

bulks large in the problem, the solution is largely a func-

tion of the legislative and administrative agencies of gov-

ernment with their facilities and experience in investigat-

ing all aspects of the problem and apprising the general

interest.

Ecker v. Western Pac. R., 318 U.S. 448, 468 (1943) (footnote

omitted). When that principle is applied to this case, it be-

comes apparent that not only is the public interest not served

by the injunction at bar, but rather, the public interest re-

quires that the injunction be set aside so that the employee

protection program of RITA can be implemented as quickly as

possible.

CONCLUSION

For the reasons set forth above, appellant RLEA respectful-

ly submits that this Court should vacate the preliminary in-

junction in No. 80-1239, and should remand this case with

instructions to dismiss the complaint for injunctive relief.

Also, appellant respectfully submits that its appeal in No. 80-

415 is now moot, and suggests that this Court note probable

jurisdiction and vacate the interlocutory order therein.

Respectfully Submitted,

WILLIAM G. MAHONEY

Joun O'B. CLARKE, Jr.

(Counsel of Record)

Hicusaw & Manoney, P.C.

Suite 210

1050 17th Street, NW

Washington, DC 20036

(202) 296-8500

Attorneys for Appellant Railway

Labor Executives’ Association

Date: July 22, 1981

APPENDIX

APPENDIX A

Constitutional Provisions And Statutes Relied Upon

1. Fifth Amendment To The Constitution Of The

United States

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in the land

or naval forces, or in the Militia, when in actual service in

time of War or public danger; nor shall any person be subject

for the same offence to be twice put in jeopardy of life or

limb; nor shall be compelled in any criminal case to be a

witness against himself, nor be deprived of life, liberty, or

property, without due process of law; nor shall private

property be taken for public use without just compensation.

2. Rock Island Transition and Employee Assistance

Act, Pub. L. No. 96-254, as originally enacted, and

as amended by Pub. L. No. 96-448*

A. Sec. 106, 45 U.S.C. §1005 Sec. 106, as amended, 45

U.S.C. §1005

Employee Protection Employee Protection

Agreements

(a) No later than [10]

days after the date of enact-

ment of [this] Act, in order

to avoid disruption of rail

service and undue displace-

ment of employees, the Rock

Island Railroad and labor

organizations representing the

Agreements

(a) No later than 5 days

after the date of enactment

of the Staggers Rail Act of

1/980, in order to avoid

disruption of rail service and

undue displacement of

employees, the Rock Island

Railroad and labor organiza-

* Those portions of the original Act deleted when amended by

Pub.L. No. 96-448 are marked by brackets; those portions of the

amended Act added by Pub.L. No. 96-448 are marked by italics.

As originally enacted

employees of such railroad,

with the assistance of the Na-

tional Mediation Board, may

enter into an agreement pro-

viding protection for

employees of such railroad

who are adversely affected as

a result of a reduction in ser-

vice by such railroad. Such

employee protection may in-

clude, but need not be limited

to, employee relocation in-

centive compensation, mov-

ing expenses, and separation

allowances.

(b) If the Rock Island

Railroad and the _ labor

organizations representing the

employees of such railroad

are unable to enter into an

employee protection agree-

ment under subsection (a) of

this section within [10] days

after the date of enactment

of [this] Act, the [parties

shall immediately submit the

matter] to the Commission.

The Commissicn shall impose

upon the parties by ap-

propriate order a fair and

equitable arrangement with

respect to employee protec-

tion no later than [30] days

after the date of enactment

As amended

tions representing the

employees of such railroad

with the assistance of the Na-

tional Mediation Board, may

enter into an agreement pro-

viding protection § for

employees of such railroad

who are adversely affected as

a result of a reduction in ser-

vice by such railroad. Such

employee protection may in-

clude, but need not be limited

to, employee relocation in-

centive compensation, mov-

ing expenses, and separation

allowances.

(b) If the Rock Island

Railroad and the _ labor

organizations representing the

employees of such railroad

are unable to enter into an

employee protection agree-

ment under subsection (a) of

this section within 5 days

after the date of enactment

of the Staggers Rail Act of

1980, the matter shall be im-

mediately submitted to the

Commission. The Commis-

sion shall impose upon the

parties by appropriate order a

fair and equitable arrange-

ment with respect to

employee protection no later

than /5 days after the date of

As originally enacted

of [this] Act, unless the Rock

Island Railroad and the

authorized representatives of

its employees have by then

entered into a labor protec-

tion agreement. For purposes

of this subsection, the term

“fair and equitable’’ means

no less protective of the in-

terests of employees than

protection [afforded under]

section 9 of the Milwaukee

Railroad Restructuring Act

(45 U.S.C. 908), subject to

the limitations set forth in

section 110 of this title.

tection arrangement is impos-

ed by the Commission under

subsection (b) of this section,

the bankruptcy court shall

immediately authorize and

direct the Rock Island

Railroad trustee to, and the

Rock Island Railroad trustee

and the labor organizations

representing the employees of

the railroad shall, immediate-

ly implement such arrange-

ment.

(d){(1)] An order of the

Commission under subsection

As amended

enactment of the Staggers

Rail Act of 1980, unless the

Rock Island Railroad, and

the authorized representatives

of its employees have by then

entered into a labor protec-

tion agreement. For purposes

of this subsection, the term

‘fair and equitable’’ means

no less protective of the in-

terests of employees than

protection established by and

pursuant to section 9 of the

Milwaukee Railroad Restruc-

turing Act (45 U.S.C. 908),

subject to the limitations set

forth in section 110 of this ti-

tle.

tection arrangement is impos-

ed by the Commission under

subsection (b) of this section,

the bankruptcy court shall

immediately authorize and

direct the Rock Island

Railroad trustee to, and the

Rock Island Railroad trustee

and the labor organizations

representing the employees of

the railroad shall, immediate-

ly implement such arrange-

ment.

(d) An order of the

Commission under subsection

As originally enacted

(b) of this section [may not

be stayed by the Commission

or by any court, and an order

of the bankruptcy court

under subsection (c) of this

section may not be stayed by

any other court.]

{(2) Any order described

in paragraph (1) of this

subsection may be appealed

only to the court of appeals

of the United States having

jurisdiction to review deci-

sions and orders of the

bankruptcy court.}] Any such

appeal to such court of ap-

peals shall be filed within 5

days after the date of entry

of the order of the Commis-

sion or the bankruptcy court,

as the case may be, and such

court of appeals shall finally

determine such appeal within

60 days after the date such

appeal is filed. [No deter-

mination by the court of ap-

peals under this subsection

may be reviewed in any other

court.]

(e) (1) Any claim of an

employee for benefits and

allowances under an

employee protection agree-

ment or arrangement entered

into under this section shall

As amended

(b) of this section and any

order of the bankruptcy court

under subsection (c) of this

section may be appealed only

to the United States Court of

Appeals for the Seventh Cir-

cuit. Any such appeal to such

court of appeals shall be filed

within 5 days after the date

of entry of the order of the

Commission or the bankrupt-

cy court, as the case may be,

and such court of appeals

shall finally determine such

appeal within 60 days after

the date such appeal is filed.

(e)(1) Any claim of an

employee for benefits and

allowances under an

employee protection agree-

ment or arrangement entered

into under this section shall

As originally enacted

be filed with the Board in

such time and manner as the

Board by regulation shall

prescribe. The Board shall

determine the amount for

which such employee is eligi-

ble under such agreement or

arrangement and shall certify

such amount to the Rock

Island Railroad for payment.

(2) Benefits and

allowances under such agree-

ment or arrangement entered

into under this section shall

be paid by the Rock Island

Railroad from its own assets

or in accordance with section

110 of this title, and claims

of employees for such

benefits and allowances shall

be treated as administrative

expenses of the estate of the

Rock Island Railroad.

(f) The first sentence of

section 7(b)(7) of the

Railroad Retirement Act of

1974 (45 U.S.C. 231f(b)(7)) is

amended by = striking out

‘and the Milwaukee Railroad

Restructuring Act’’ and inser-

ting in lieu thereof ‘*, the

Milwaukee Railroad Restruc-

turing Act, and the Rock

Island Railroad Transition

and Employee Assistance

Act”’.

As amended

be filed with the Board in

such time and manner as the

Board by regulation shall

prescribe. The Board shall

determine the amount for

which such employee is eligi-

ble under such agreement or

arrangement and shall certify

such amount to the Rock

Island Railroad for payment.

(2) Benefits and

allowances under such agree-

ment or arrangement entered

into this section shall be paid

by the Rock Island Railroad

from its own assets or in ac-

cordance with section 110 of

this title, and claims of em-

ployees for such benefits and

allowances shall be treated as

administrative expenses of

the estate of the Rock Island

Railroad.

(f) The first sentence of

section 7(b)(7) of the

Railroad Retirement Act of

1974 (45 U.S.C. 231f(b)(7)) is

amended by striking out

*‘and the Milwaukee Railroad

Restructuring Act’’ and inser-

ting in lieu thereof ‘‘, the

Milwaukee Railroad Restruc-

turing Act, and the Rock

Island Railroad Transition

and Employee Assistance

Act.”’

As originally enacted

B. Sec. 110, 45 U.S.C. §1008

Obligation Guarantees

(a) The Secretary, under

the authority of section 511

of the Railroad Revitalization

and Regulatory Reform Act

of 1976 (45 U.S.C. 831),

shall guarantee obligations of

the Rock Island Railroad for

purposes of providing em-

ployee protection in accor-

dance with the terms of any

employee protection agree-

ment or arrangement

entered into under section

106 of this title.

(b) Any obligation

guaranteed pursuant to this

section shall be treated as an

administrative expense of the

estate of the Rock Island

Railroad.

principal amount of obliga-

tions which may be

guaranteed by the Secretary

pursuant to this section shall

not exceed $75,000,000.

(d) The total liability of

the Rock Island Railroad in

connection with benefits and

As amended

Sec. 110, as amended, 45

U.S.C. §1008

Obligation Guarantees

(a) The Secretary, under

the authority of section 511 of

the Railroad Revitalization

and Regulatory Reform Act

of 1976 (45 U.S.C. 831), shall

guarantee obligations of the

Rock Island Railroad for pur-

poses of providing employee

protection in accordance with

the terms of any employee

protection agreement or ar-

rangement entered into

under section 106 of this title.

(b) Any obligation

guaranteed pursuant to this

section shall be treated as an

administrative expense of the

estate of the Rock Island

Railroad.

principal amount of obliga-

tions which may be

guaranteed by the Secretary

pursuant to this section shall

not exceed $75,000,000.

(d) The total liability of

the Rock Island Railroad in

connection with benefits and

As originally enacted

allowances provided under

any employee protection

agreement or arrangement

entered into under section

106 of this title shall not ex-

ceed $75,000,000.

(e) Except in connection

with obligations guaranteed

under this section, the United

States shall incur no liability

in connection with any

employee protection agree-

ment or arrangement entered

into under section 106 of this

title.

(f) Section SIM(g) and

section 516 of the Railroad

Revitalization and Regulatory

Reform Act of 1976 (45

U.S.C. 831(g) and 836) shall

not apply to any obligation

guaranteed under this section.

As amended

allowances provided under

any employee protection

agreement or arrangement

entered into under section

106 of this title shall not ex-

ceed $75,000,000.

(ce) Except in connection

with obligations guaranteed

under this section, the United

States shall incur no liability

fo employees in connection

with any employee protection

agreement or arrangement

entered into under section

106 of this title.

(f) Section S5i1(g) and

section 516 of the Railroad

Revitalization and Regulatory

Reform Act of 1976 (45

U.S.C. 831(g) and 836) shall

not apply to any obligation

guaranteed under this section.

C. Section 124 (c), as added by Pub.L. No. 96-448, 45 U.S.C.

$1018 [no comparable provision in RITA, as originally

enacted].

Sec. 124. (c) Nothing in this Act or in the Milwaukee

Railroad Restructuring Act (45 U.S.C. 901 et seq.) shall limit

the right of any person to commence an action in the United

States Court of Claims under section 1491 of title 28, United

States Code (commonly referred to as the Tucker Act).

APYENDIX B

List of RLEA Member Organizations

American Railway & Airway Supervisors Association,

Division of BRAC

American Train Dispatchers Association

Brotherhood of Locomotive Engineers

Brotherhood of Maintenance of Way Employes

Brotherhood of Railroad Signalmen

Brotherhood of Railway, Airline and Steamship Clerks

Brotherhood Railway Carmen of the United States and

Canada

Hotel & Restaurant Employees & Bartenders International

Union

International Association of Machinists and Aerospace

Workers

International Brotherhood of Boilermakers and Blacksmiths

International Brotherhood of Electrical Workers

International Brotherhood of Firemen & Oilers

International Longshoremen’s Association

International Organization of Masters, Mates and Pilots

National Marine Engineers Beneficial Association

Railroad Yardmasters of America

Railway Employes Department, AFL-CIO

Sheet Metal Workers’ International Association

Seafarers International Union of North America

Transport Workers Union of America

United Transportation Union

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.