Petitioners Reply Brief — Transportation Union v. Long Island R. Co.

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v FILED

eS JAN 18 1982

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CLERK

— — — —— —

IN THE

Supreme Count of the Anited States

OcTOBER TERM, 1980

UNITED TRANSPORTATION UNION,

Petitioner,

v.

LONG ISLAND RAILROAD COMPANY and

METROPOLITAN TRANSPORTATION AUTHORITY,

Respondents.

On Writ of Certiorari to the United States Court of Appeals

for the Second Circuit

REPLY BRIEF FOR THE PETITIONER

EDWARD D. FRIEDMAN

Counsel of Record

1211 Connecticut Avenue, N.W.

Suite 414

Washington, D.C. 20086

(202) 887-0736

ROBERT HART

General Counsel

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

WILSON « Eras Prinrine Co., Inc. - 769-0006 . WasnineTon, D.C. 20001

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TABLE OF CONTENTS

Page

ARGUMENT 1

CONCLUSION 9

TABLE OF AUTHORITIES

CASES:

Alewine v. City Council of Augusta, Georgia, 505

F. Supp. 880 (S.D. Ga. 1981) appeal docketed,

No. 81-7490 (5th Cir. June 5, 1981) 10

Brotherhood of R. R. Trainmen v. Jacksonville Ter-

minal Co., 394 U.S, 399 6

Bus Employees v. Wisconsin Board, 340 U. 8. 383. 5

California v. Taylor, 858 U.S. 558 2. 8, 7, 9

Dove v. Chattanooga Area Regional Transportation

Authority, Civ. A. No. 1-80-249 (E. D. Tenn.

July 21, 1981) ....... 9

Gibbons v. Ogden, 9 Wheat ...... r 8

Helvering v. Powers, 298 U.S. 214 4

Hodel v. Virginia Surface Mining & Reclamation

Association, No. 79-1538 (June 15, 1981) .......... 4

Hood & Sons v. DuMond, 386 U.S. 52 8

Houston E & W Texas Ry Co. v. United States,

, . 8

ICC, Ex Parte No. 299 (Sub. No. 1) and No. 36874

(1981) appeals docketed, No. 81-4139 (2nd Cir.

Aug. 7, 1981) and No, 81-4306 (5th Cir. Aug. 7,

1981) 3

Joiner v. City of Macon, Civ. A. No. 79-287-MAC

(M.D. Ga. April 24, 1981), request for permis-

sion to appeal filed (5th Cir. June 14, 1981). 10

Kramer v. New Castle Area Transit Authority,

Civ. A. No, 80-1008G (W.D. Pa. June 11, 1981),

appeal docketed, No. 81-2223 (3d Cir. Aug. 10,

1981) .. 9

Lafayette v. Louisiana Power & Light Co., 435

r t ce: DE 4,5

Long Island Rail Road v. Aberdeen & Rock/fish Rail

Road Co., 489 U.S. 1 8,7

ii

TABLE OF AUTHORITIES—Continued

Page

National League of Cities v. Usery, 426 U.S. 833....passim

Ohio v. Helvering, 292 U.S. 860 0o 4

San Antonio Metropolitan Transit Authority v.

Donovan, Civ. A. No. SA-79-CA-457 (W. D. Tex.

Nov. 17, 1981) notice of appeal filed (Dec. 16,

1 9

Sanitary District v. United States, 266 U.S. 405. x

United States v. California, 297 U.S. 177 — ©

CONSTITUTION AND STATUTES:

United States Constitution:

Article I, Section 8 passim

1 ———— passim

Federal Employers’ Liability Act, as amended, 45

eee SERCH > CES 2

Interstate Commerce Act, as amended, 49 U.S.C.

ESE 2S EEE Se a 2,7

New York Civ. Serv. Law § 200 et seq. (McKinney

1973 & Supp. 1980) (“Taylor Law“) 3

Railway Labor Act, as amended, 45 U.S.C. § 151

c 2. 7

Railroad Retirement Act, as amended, 45 U.S.C.

nenen ee ae 2,7

Railroad Unemployment Insurance Act, as

amended, 45 U.S.C. § 881 2

Staggers Rail Act of 1980, Pub. L. No. 96-448 3

Urban Mass Transportation Act of 1964, 49 U.S.C.

IE SARE SES SSL 10

MISCELLANEOUS:

American Public Transit Association, Transit Fact

e cecitecccececenesecnnntucccbiomnessoens 10

46 Federal Register 61531 (Dec. 17, 1981) ............ 10

New York Times, Jan. 4, 1982ũ722 10

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

No. 80-1925

UNITED TRANSPORTATION UNION,

v. Petitioner,

LONG ISLAND RAILROAD COMPANY and

METROPOLITAN TRANSPORTATION AUTHORITY,

Respondents.

On Writ of Certiorari to the United States Court of Appeals

for the Second Circuit

REPLY BRIEF FOR THE PETITIONER

ARGUMENT

1. Contrary to the underlying premise of opponents’

briefs, this is not a case of federal intrusion into an

area of State prerogative in the existing structure of

federal-state relations.

The instant case, unlike National League of Cities v.

Usery, 426 U.S. 833, does not concern itself with functions

like fire prevention or police protection, which have his-

torically been recognized to be the responsibility of local

government. Here the concern is with a railroad, and

more specifically with the proposed displacement of federal

railway legislation long applicable to the Long Island Rail-

road and not disputed until fourteen years after it was

acquired by the State of New York.

The long history of the American railroad industry

and of government involvement in that industry is dis-

cussed in Petitioner’s Brief (hereinafter designated “Pet.

Br.“) at 23-31. The crucial aspects of that history, in the

instant connection, are that the ownership and operations

of interstate railroads of all kinds—freight, passenger, and

commuter—have predominantly been in the private sector,

and that government involvement has at all times been the

province of the federal government, taking the form of a

wide variety of statutes enacted under the Commerce

Clause. The “consistent congressional pattern in railway

legislation which preceded the Railway Labor Act was to

employ all-inclusive language of coverage with no sug-

gestion that state-owned railroads were not included,”

and this Court has held that Congress followed that pat-

tern in the Railway Labor Act, intending to extend its

provisions to all interstate railroads, private and public.

California v. Taylor, 353 U.S. 553, 564.

2. When the State of New York in 1966 acquired and

began to operate the Long Island Railroad, this pre-

existing body of federal regulation was not imposed upon

the new owner by reason of its Statehood. The State had

chosen, rather, upon policy considerations of its own, to

enter into a field long settled to be constitutionally sub-

ject to such regulation. It had taken over a railroad that

had “historically considered itself a ‘carrier’ within the

meaning of the [Railway Labor] Act, the Interstate

Commerce Act, . and related statutes” and had con-

sistently filed reports required by the Interstate Commerce

Act with the ICC” and whose employees had “consist-

ently received the benefit of the Railroad Retirement

Act, the Railroad Unemployment Insurance Act, and

the Federal Employers’ Liability Act.” (Findings, Appen-

dix to the Petition (hereinafter designated “Fdgs., Pet.

App.“) at 35a-36a). Even after the takeover, the State

made no change in this regard, the LIRR continued to

characterize itself as “a Class I steam railroad... engaged

in business as a common carrier for hire in the trans-

portation of passengers and property in interstate and for-

eign commerce” (Pet. Br., at 8,9). Indeed in the very dis-

pute “which lies at the heart of this action, the Railroad

has affirmatively sought to invoke the collective bargaining

and mediation procedures set out in the [Railway Labor]

Act, including the establishment of a Presidential Emer-

gency Board” (Fdgs., Pet. App. at 36a).

New York made no change in its posture in this re-

gard until fourteen years after it acquired ownership,

when on February 8, 1980, in the course of the instant

litigation, it undertook to substitute New York labor faw

for federal labor law by transforming the LIRR from a

private stock company to “a public benefit corporation

whose employees would [for the first time] be facially

subject to the Taylor Law” (Fdgs., Pet. App. at 81a). The

railroad’s “essential character within this context” was

not changed by this “simple expedient of reorganizing its

corporate structure under state law” (Fdgs., Pet. App. at

86a).

On this record, respondents cannot now reasonably

contend that “Congress has interposed a Federal regula-

tion which commands New York to apply to a transit

service [the LIRR] .. . procedures designed for and

best suited to privately-owned railroads or airlines.”

Respondents’ Brief (hereinafter designated “Resp. Br.“)

at 15. New York chose to acquire and operate a rail-

road that was subject to those very procedures.

The existence of those procedures was an intrinsic

aspect of the field the State chose to enter; it

was not a diminution of the State’s freedom to decide

but a consideration to be evaluated by the State in

making its decision.

1 And, of course, the LIRR continues to seek rate adjustments

under the Interstate Commerce Act. See ICC Ex Parte No, 299

(Sub. No. 1), Increases in Freight Rates ... of the LIRR and

No. 36874 (1981), appeals docketed, No. 81-4139 (2nd Cir., Aug. 7,

1981) and No. 81-4306 (6th Cir., Aug. 7, 1981); and Application

for a Staggers Act Surcharge, filed with the ICC, on September 12,

1981, under same style. See also, in connection with these ICC

proceedings, LIRR v. Aberdeen & Rockfish Railroad Co., 439 U.S. 1.

4

8. At the heart of respondents’ argument is the ex-

pressed assumption that immunity under the Tenth

Amendment “must turn on the fundamental dependence

of the public on the service involved” (Resp. Br., at 11 and

passim.). The assumption is erroneous and rests on a

distortion of National League. The test laid down in

National League is not whether the activity in question

is essential to the public, but whether it is essential to

the existence and functioning of the State as a State

(426 U.S. at 845 and passim.). The community’s need

for a particular economic service may properly move a

State to remedial action—by regulation, subvention, pro-

motion, tax remission, or even direct provision of the

needed service. But when the State chooses the last men-

tioned course, and enters into an activity traditionally the

function of private business, it does not thereby endow

that activity with the aura and immunities of sover-

eignty. Cf. Helvering v. Powers, 293 U.S. 214, in which

the City of Boston’s need for adequate local transportation

was held not to prevent application of the federal tax laws

to a publicly operated street. railway, since the provision

of that service by the State was “distinct from the usual

governmental functions that are immune from federal

taxation in order to safeguard the necessary independ-

ence of the State” (id., at 227). Cf. also Ohio v. Hel-

vering, 292 U.S. 360, 368, 371.

This distinction is stressed throughout National

League, which repeatedly equates the functions that are

immune from Commerce Clause regulation with those

that are the activities of “States qua States” and are

“essential to [the States’] separate and independent

existence” (e.g., at 845, 847, 851, 852). See also Hodel v.

Virginia Surface Mining & Reclamation Association, No.

79-1588 (June 15, 1981). And see Lafayette v. Louisi-

ana Power & Light Co., 485 U.S. 389, 428, 424 (conc.

op. of the Chief Justice) :

The National League of Cities opinion focused its

delineation of the “attributes of sovereignty” .

on a determination as to whether the State’s interest

involved “functions essential to [its] separate and

independent existence.’” [citation omitted] It should

be evident . . that the running of a business enter-

prise [and hence “the supplying of electricity”) is

not an integral operation in the area of traditional

government functions.

Respondents’ metaphor “life blood of the community”

is no more apropos of passenger railroad service than

of the “supplying of electricity” in Louisiana Power or

of the many services upon which our local communities

are dependent—among others, the distribution of gas,

oil, and other forms of energy, the provision of food

and drugs, and the utilization of communication chan-

nels. All are subject to a variety of federal programs

necessarily requiring nationwide application without dif-

ferentiation between public and private ownership. Cf.

Bus Employees v. Wisconsin Board, 340 U.S. 383, holding

that “federal labor legislation, encompassing as it does

all industries ‘affecting commerce,’” overrides state pub-

lie utility policies designed to ensure an uninterrupted

supply of essential public utility service, including

among such services: “water, heat, gas, electric power,

public transportation, and communications” (at 388, 391,

emphasis added).

Respondents themselves concede, in distinguishing

United States v. California, that federal regulation would

be constitutionally permissible if the LIRR were exclu-

sively engaged in the carriage of freight (Resp. Br., at

23). Yet the freight operations of a railroad—the carriage

of coal for industrial and domestic purposes, of raw mate-

rials to keep factories operating, of finished products to

keep businesses moving, of mail to complete the commu-

nications network—are surely as essential to the economic

life of the community as is the transportation of passen-

gers. Clearly, the respondents’ test—public dependence

on the particular service—goes too far. The correct test,

confirmed by National League, is not whether the public

needs the State to operate the railroad, but whether the

State needs to operate the railroad in order to be a sov-

ereign State.“

4. Concededly, the term “traditional government func-

tions,” as used in National League, obviously is not limited

to functions which the States performed in 1789. It is

equally clear that the word “traditional” loses its meaning

when stretched to cover surveys of “competing demands

for essential services” by any given State government at

any given time, as respondents contend (Resp. Br., 26 and

passim).

The Court’s repeated reference to the “traditional”

recognition of an activity as an integral governmental

function cannot, as respondents’ would have it, be cava-

lierly dismissed as having no reference to time or custom

(Resp. Br., at 11, 12). The heavy stress in National

League on the “traditional” functions of State govern-

ment must be read to reflect an historical perspective, one

which looks not to the current importance of the activity

to the public, but to its standing under time-honored and

well-rooted conceptions of the essential nature of State

government within the federal-state system. While a

function unknown in 1789 may come to be traditional

after a sufficient period of widespread, consistent integra-

tion by the various states into the core prerogatives of

state governments, as in the case of fire protection and

police protection, this is hardly the case with railroads,

freight or passenger, as appears from the discussion of

the history and current structure of the railroad industry

(Pet. Br., at 23-31). No matter how broadly the term is

2 Respondents’ “public dependence” argument fails also in that

it is based upon the special conditions asserted to prevail in the

New York City area. But the question presented by this case is one

of the limits of federal power. There cannot be one rule for the

City of New York and others for other localities. “The needs of

the subject matter manifestly call for uniformity.” Brotherhood of

R.R. Trainmen v. Jacksonville Terminal Co., 349 U.S. 369, 381.

7

read, a tradition“ cannot be created by the action of a

single State with respect to a single railroad, upon a

theory belatedly asserted in connection with a particular

law suit and maintained only with respect to the partic-

ular statute upon which that litigation is based.

5. In short, National League speaks not in terms of

fundamental dependence of the public on the service in-

volved but in terms of services “in an area which the

States have regarded as integral parts of the governmen-

tal activities” (id., at 854, n.18). Respondents have not

shown that the States have ever so regarded the opera-

tions of railroads engaged in the transportation of freight

and of passengers. The contrary is true. All commuter

railroads of this character, whether privately owned and

privately operated, publicly owned and privately operated

or, as in New York, publicly owned and publicly

operated, have at all times considered themselves subject

to the Railway Labor Act, the Railroad Retirement Act,

the Interstate Commerce Act, and all of the other fed-

eral railroad laws, except for the rare challenges in par-

ticular connections rejected by the Courts, as in California

vl Taylor, 353 U.S. 553, and United States v. California,

295 U.S. 175. New York alone began to deviate from

this pattern during the course of this litigation and its

deviation has been limited to the single subject of labor

relations. In all other respects New York still regards

LIRR as a railroad subject to federal railroad laws. See

Long Island Railroad v. Aberdeen & Rockfish Railroad

Co., 489 U.S. 1, in which LIRR was the petitioner before

this Court.

6. In sum, there is no substance, we submit, to respond-

ents’ contention that the States have a sovereign right, su-

perior to that of the United States, to use on their own

terms a railroad which, although heavily engaged in car-

rying passengers, is also, in the words of the Court below,

“a crucial physical link with other interstate rail car-

riers in the movement of interstate rail freight via New

York” (Pet. App., at 9a). The paramount purpose of the

Commerce Clause is to grant the United States the au-

thority the Confederation lacked to take all steps neces-

sary and proper to establish and maintain an integrated

nationwide economic system (See particularly Mr. Justice

Jackson’s discussion of the Commerce Clause in Hood &

Sons v. DuMond, 386 U.S. 525, 582-534). As has been

recognized from the beginning, the very core of that au-

thority is the superintendence of the means of transporta-

tion by which interstate commerce moves throughout the

Nation (See, ¢.g., Gibbons v. Ogden, 9 Wheat. 1).

Whatever may be the rule in other respects, certainly

when the question is the primacy of the competing

claims of the United States and a State to regulate “com-

mon carriers by rail in interstate commerce,” it “is not a

controversy between equals... I; and] the interests of the

Nation are more important than those of any State” (Sani-

tary District v. United States, 266 U.S. 405, 425-426).

The fact that carriers are instruments of intrastate

commerce, as well as of interstate commerce, does

not derogate from the complete and paramount au-

thority of Congress over the latter or preciude the

Federal power from being exerted to prevent the

intrastate operations of such carriers from being

made a means of injury to that which has been con-

fided to Federal care. [Houston E. & W. Texas Ry.

Co. v. United States, 284 U.S. 342, 351.]

The result must be the same whether or not the inter-

state carrier is owned by a state and whether or not that

carrier performs important local functions in addition to

its interstate freight activity.

CONCLUSION

For the foregoing reasons, the judgment of the Court

of Appeals should be reversed and that of the District

Court affirmed.“

Respectfully submitted,

EDWARD D. FRIEDMAN

Counsel of Record

1211 Connecticut Avenue, N.W.

Suite 414

Washington, D.C. 20036

(202) 887-0736

General Counsel

United Transportation Union

14600 Detroit Avenue

Cleveland, Ohio 44107

Of Counsel:

HAROLD A. Ross

January 1982

The issue whether city trolleys, buses, and subways are within

the area that States have traditionally regarded as integral parts

of their governmental activities is not presented by this case, in

which we deal with an interstate railroad. It is difficult to conceive

of any other American industry that has been so thoroughly regu-

lated by federal law over so long a period as the “railroad world”

which this Court has described as “a state within a state”...

[with] its own customs and its own vocabulary, and . .. rules of its

own making” (California v. Taylor, 353 U.S. at 565).

The question as to city transit is moreover directly presented in

a case noticed for appeal to this Court (San Antonio Metropolitan

Transit Authority v. Donovan, Civ. A. No. SA-79-CA-457, (W.D.

Tex., Nov. 17, 1981, notice of appeal filed, Dec. 16, 1981), and in

several other 1981 decisions in which appeal proceedings are pend-

ing in the Courta of Appeals. Kramer v. New Castle Area Transit

Authority, Civ. A. No. 80-1108G (W.D. Pa., June 11, 1981), appeal

docketed, No. 81-2228 (8d Cir. Aug. 10, 1981) ; Dove v. Chattanooga

10

Area Regional Transportation Authority, Civ. A. No. 1-80-249

(E.D. Tenn. July 21, 1981), appeal docketed, No. 81-5636 (6th Cir.

Sep. 2, 1981); Alewine v. City Council of Augusta, Georgia, 505

F. Supp. 880 (S.D. Ga. 1981), apeal docketed, No. 81-7490 (5th

Cir. June 5, 1981); see contra, Joiner v. City of Macon, Civ. A.

No. 79-287-MAC (M.D. Ga. April 24, 1981), request for permission

to appeal filed (5th Cir. June 14, 1981). The records developed in

those cases will doubtless be particularly directed to considerations

pertinent to mass transit and will present the appropriate vehicles

for consideration of the application of the Tenth Amendment in

that area.

We note, however, that it was the national government, not the

State governments, which initiated the steps by which a stronger

governmental role in the movement of masses of people in urban

areas began to develop. Prior to the enactment of the Urban Mass

Transportation Act in 1964, 49 U.S.C. §§ 1601, et seq., city trolleys

and buses were traditionally regarded as private sector business

activities. See American Public Transit Association, Transit Fact

Book (1978-1979, ed., at 55). Municipal ownership began at that

time with heavy federal financial support, originally providing

capital and later providing operating funds, subject to federal

policies covering planning and manpower, including collective bar-

gaining. The strong role of the federal government in this field

has continued to this day. It is only in recent months that the

federal-state roles in mass transit are undergoing re-examination

by the Federal Department of Transportation. See 46 Federal Reg-

ister 61531 (Dec. 17, 1981). Recent surveys indicate that fed-

eral withdrawal from its mid-century role in this respect may

impair the States’ ability to structure its operations in this area,

the exact reverse of the National League criteria for immunity.

See New York Times, Jan. 4, 1982.