Petition for Writ of Certiorari — Railway Labor Executives' Assn. v. Chesapeake Western Railway

Supreme Court brief1991

Ask Donna

What actually matters in this document.

Text

IN THE

Supreme Court of the Yuited States

OCTOBER TERM, 1990

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, ef a/.,

Petitioners,

CHESAPEAKE WESTERN RAILWAY, NORFOLK SOUTHERN

RAILWAY COMPANY, NORFOLK & WESTERN RAILWAY

COMPANY, and NORFOLK SOUTHERN CORPORATION,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

PETITION FOR A WRIT OF CERTIORARI

WILLIAM G. MAHONEY

JOHN O’B. CLARKE, JR.*

HIGHSAW, MAHONEY

& CLARKE, P.C.

Suite 210

1050 17th Street, N.W.

Washington, D.C. 20036

(202) 296-8500

Attorneys for Petitioners

Date: January 15, 1991 * Counsel of Record

WILSON - EPEs PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

aoa

—_

SS COU 2

2. s

a a

ce ey oe eee

eS ee

— «ie

fs,

a oe

ie, sia

abe i Oe no es

a ozs

r =

Te eS «

QUESTION PRESENTED *

Does a carrier’s disputed, but “arguable” claim of a

contractual right to alter the actual, objective working

conditions of its employees while bargaining for an agree-

ment to cover those conditions, relieve the carrier of its

obligation under the Railway Labor Act, 45 U.S.C. § 151,

et seqg., to preserve and maintain unchanged during the

bargaining process those rates of pay, rules, or working

conditions ox established practices which were in effect

prior to the time the bargaining dispute arose and which

are related to that dispute?

—

* Petitioners in th’s case are the Railway Labor Executives’

Associatio: and the following fourteen (14) labor organizations:

American Railway & Airway Supervisors Association

(Division of TCU) ;

American Train Dispatchers Association ;

Brotherhood of Locomotive Engineers;

Brotherhood of Maintenance of Way Employes;

Brotherhood of Railroad Signalmen;

Brotherhood of Railway Carmen (Division of TCU) ;

International Association of Machinists and

Aerospace Workers;

International Brotherhood of Boilermakers, Iron Ship Builders,

Blacksmiths, Forgers and Helpers;

International Brotherhood of Electrical Workers;

International Brotherhood of Firemen & Oilers;

Sheet Metal Workers’ International Association ;

Transportation © Communications International Union (TCU) ;

United Transportation Union; and

Yardmasters Department, UTU.

Several other labor organizations participated in earlier stages of

this proceeding, but withdrew prior to the decisions by the district

court which were the subject of the appeals tc the Fourth Circuit.

Also, one newly-formed rail carrier (/.e., Carolina Coastal Railway,

Inc.), was named as a defendant when this case was filed, but was

dismissed when Petitioners amended their complaint prior to the

district court’s rulings at bar. Petitioners submit that those other

organizations and that carrier no longer have an interest in this case.

See, Rule 12.4 of the Rules of this Court.

(i)

TABLE OF CONTENTS

QUESTIONS PRESENTED ........ secemeislisie asunbeataninbhas

TABLE OF AUTHORITIES ......

OPINIONS BELOW ..............

JURISDICTION................... + ne RA a oR

MOONS W MED cu. ssccvncncvsnssesvenscsacnevssesesesesvessees

STATEMENT OF THE CASE ....... Taiateicd eta tasiiceaatek

A. The Line Transfer Dispute ............. Seewctks Pe

m. ame aeecus Guo Disnute................................

C. Rulings By The Lower Courts

REASONS FOR GRANTING THE WRIT 0...

II,

ITI.

WHETHER OR NOT THE STATUS QUO

OBLIGATION APPLIES IN A MAJOR DIS-

PUTE, WHERE ONE OF THE DISPUTANTS

CLAIMS A CONTRACTUAL RIGHT TO

ALTER THE STATUS QUO, PRESENTS AN

ISSUE WHICH IS IMPORTANT TO THE

ORDERLY ADMINISTRATION OF THE

RAILWAY LABOR ACT. ..................

THIS COURT SHOULD RESOLVE THIS

QUESTION BECAUSE THE FOURTH CIR-

CUIT HAS DECIDED THIS IMPORTANT

ISSUE IN A WAY THAT CONFLICTS WITH

RELEVANT DECISIONS BY THIS COURT

THIS COURT SHOULD RESOLVE THIS

QUESTION BECAUSE THE FOURTH CIR-

CUIT HAS DECIDED THIS ISSUE IN A

WAY THAT CONFLICTS WITH DECISIONS

BY OTHER CIRCUITS AND ADDS FUR-

THER CONFUSION TO AN UNSETTLED

AREA OF THE LAW ....................

CONCLUSION ................. Eas

TABLE OF CONTENTS—Continued

APPENDICES

APPENDIX A

Fourth Circuit’s Decision, RLEA v. Chesapeake

Western Ry., 915 F.2d 116 (4th Cir. 1990) _.....

APPENDIX B

District Court Order entered February 16, 1990...

APPENDIX C

District Court Transcript of Proceedings (Ex-

cerpts), dated February 16, 1990

APPENDIX D

District Court Order entered May 15, 1990...

APPENDIX E

District Court Memorandum Opinion entered

ee I sear eee tS |

APPENDIX F

District Court Judgment entered July 3, 1990...

APPENDIX G

Fourth Circuit. Order entered May 18, 1990

SRR Se ae corsa ene ec CUNT ent en

APPENDIX H

Statutes Relied Upon o.oo...

APPENDIX |

List of RLEA Member Organizations...

Page

l5a

28a

32a

60a

6la

66a

Sla

TABLE OF AUTHORITIES

ES RELIED UPON: Page

ALPA v. Eastern Air Lines, Inc., 863 F.2d 891

(D.C, Cir. 1988), en bane denied (1989), cert.

pending, Sup. Ct. No. 88-1403 ...... eee 23

Chicago & North Western Transp. Co. v. RLEA,

908 F.2d 144 (7th Cir. 1990), pet. for cert.

pending, Sup. Ct. No. 90-991 .....00.......cc ee. ... 16, 23

Consolidated Rail Corp. ». RLEA, 491 U.S. ——

(1989) ........ Solasdthccasscisanaaleishissendescddsusianiehiaddacdeaaiaaitnacal passim

CSX Transportation, Ine. v. UTU, 879 F.2d 990

(2d Cir. 1989), cert. denied, 110 S.Ct. 720

(1990) .. is st . 22, 23

Detroit & Toledo Shore Line R. R. v. _UTU, 396 U. Ss.

142 (1969) ............. IRN t Dre Meee es Aciictnnsis passim

Ex Parte 392 (Sub-No. 1), Class Exemption for

the Acquisition and Operation of Rail Lines

Under 49 U.S.C. 10901, 1 1.C.C.2d 810 (1985),

aff'd sub nom. Illinois Commerce Comm. v. ICC,

817 F.2d 145 (D.C. Cir. 1987) (table) ................. 5

General Committee of Adjustment v. CSX R.R.,

893 F.2d 584 (8rd Cir. 1990) . ake 23

Pittsburgh & Lake Erie R.R. v. RLEA, 491 US.

—— (1989) 20000... 7,16

RLEA v. Chicago & North Western ‘Transp. Co.,

890 F.2d 1024 (8th Cir. 1989), cert. denied, 110

OR. EE TINO * vssuarssncsdchscseonnassceobhasunmede soebecn 22, 23

Rutland Ry. v. BLE, 307 F.2d 21 (2d Cir. 1962),

cert, denied, 372 U.S. 954 (1963) .. ee . 20-21

Southern Ry. v. Brotherhood of Locomotive Fire-

men, 337 F.2d 127 (D.C. Cir. 1964) ...................... 21-22

United Industrial Workers v. Board of Trustees,

es FF oe fe ee | Re ee 22

Wilmington Terminal R.R.-—Purchase and Lease, 6

I.C.C.2d 799 (1990), petition for review pend-

ing, Gth Cir. No. SOBER ...............:....-...:..-.. # 5

STATUTES AND OTHER MATERIAL:

Interstate Commerce Act, 49 U.S.C. § 10101, et

ae DR eatuissassbdaeaacaanetaenee 5

Section 11343, 49 USC. § 11343 saveiiacneveniaas 12

TABLE OF AUTHORITIES—Continued

Page

Railway Labor Act, 45 U.S.C. § 151, et seq. ............ passim

Section 1 First, 45 U.S.C. § 151 First 2.000.000... 14

Section 2 First, 45 U.S.C. § 152 First... ............. 3

Section 2 Third, 45 U.S.C. § 152 Third .............. 9-10

Section 2 Seventh, 45 U.S.C. § 152 Seventh...... 3

Section 2 Ninth, 45 U.S.C. § 152 Ninth .............. 10

Section 3, 45 U.S.C. § 153 ..........00..... Raieeniaaiasectes 3

Section 5 First, 45 U.S.C. § 155 First ......00000...... 2,7

I GG Crit We I ca snnnssccncastnskntnarccsancacsnacad passim

BR I ote BO wane sisnecsccnnsesscscssnnnccanccs 8, 8,15

mection BOL, 65 U.G.C. & BBR noc... ccccccsccccncecccceccssss 14

Emergency Board No. 219 (created by Executive

Order No. 12,714, May 3, 1990), 55 Fed. Reg.

SUEDE "ccyiceuuapsncatananeiedevebucias ainuiaaineiend dee tikamamaonannens 8

Hearings on H.R. 7180, Before House Committee

On Interstate and Foreign Commerce, 69th

a GER). Roce Pe Ee 14-15

Hearings on S. 2306, Before Senate Committee On

Interstate Commerce, 69th Cong., 1st Sess.

SR i ccxensnapnnstinvsonionsnilinins eR ek Rod 15

2B U.S.C. § 1254 (1) oo ccceccceccceccseesevecseecseesseeseeeseveee 2

RTT, BF IIE anon mena scecsnsccnnacosnnnsanvnccernerornnee 12

2B U.S.C. § 1292 (a) (1) noone eee eee ee eee eee teen 12

DO U.G.C. & 2BS TE) cacao ccc a cncscccccsccccsscceccccccecconeen 9

QB U.S.C. § 2101 (6) ccc ce ccee cceseecsvecsseeseeeoseessteeeeeeseee 2

Rules of the United States Supreme Court

BE NIE sx txcentndkscaiearsincrnaaneemnd enone eae i

IN THE

Suprene Court of the United States

OCTOBER TERM, 1990

No.

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, et al.,

Petitioners,

CHESAPEAKE WESTERN RAILWAY, NORFOLK SOUTHERN

RAILWAY COMPANY, NORFOLK & WESTERN RAILWAY

CoMPANY, and NORFOLK SOUTHERN CORPORATION,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioner Railway Labor Executives’ Association

[hereinafter, “RLEA”]' and fourteen (14) labor organi-

zations ° respectfully request that this Court issue a writ

1 RLEA is a voluntary, unincorporated association of the chief

executive officers of seventeen (17) labor organizations which col-

tectively represent most railroad employees in this Country. A list

of RLEA’s affiliated labor organizations is reproduced herein as

Appendix I at 8la; those organizations that are petitioners herein

are marked by asterisks.

- The fourteen petitioning labor organizations, all but two of

which (i.e., the United Transportation Union |hereinafter, “UTU” |]

of certiorari to the United States Court of Appeals for

Fourth Circuit to review the decision of that court in

RLEA v. Chesapeake Western Ry., 915 F.2d 116 (4th

Cir. 1990).

OPINIONS BELOW

The opinion of the Fourth Circuit is reported at 915

F.2d 116 and is reproduced herein as Appendix A at la-

lla. The initial ruling by the district court was given

orally on February 16, 1990, is not reported, but is re-

produced herein as Appendix C at 15a-27a. The district

court subsequently issued a Memorandum Opinion, which

is reported at 738 F. Supp. 1544 and is reproduced herein

as Appendix E at 32a-59a."

JURISDICTION

The decision of the Fourth Circuit was entered on Sep-

tember 17, 1990 and on December 10, 1990, Mr. Chief

Justice Rehnquist, acting as a Circuit Justice, signed an

order granting petitioners to and including January 15,

1991, in which to file this petition. RLEA v. Chesapeake

Western Ry., Sup. Ct. No. A-439. This petition is timely

under 28 U.S.C. §2101(e) and seeks to invoke this

Court’s jurisdiction under 28 U.S.C. § 1254/1).

STATUTES INVOLVED

This case involves the proper interpretation of the

Railway Labor Act’s status quo obligation, which, as

applicable here, is contained in Sections 5 First, 6 and

and its Yardmasters’ Department) are affiliated with RLEA, repre-

sent employees of respondents; those organizations are listed in

footnote * on page (i) of this petition.

%On May 15, 1990, the district court entered an order denying

petitioners’ request for an injunction to enjoin ene of the line sales

at bar, and on May 18, 1990, United States Circuit Judge H.E.

Widener, Jr., issued an order denying petitioners’ request for such

an injunction pending appeal. Neither order is reported, but both

are reproduced herein as Appendices D and G, respectively, at

28a-3la and 6la-65a.

10 of the Act (45 U.S.C. $$ 155 First, 156, 160), when

the carrier claims an arguable contractual right to make

the change which the union asserts alters the status quo.

Sections 2 First, 2 Seventh and 3 of the Act (45 U.S.C.

§§ 152 First, 152 Seventh and 153) are also relevant to

this case. All of the above statutory provisions are re-

produced herein as Appendix H at 66a-80a.

STATEMENT OF THE CASE

This Court has long recognized that the Railway Labor

Act, 45 U.S.C. $151, et seg., provides different methods

to resolve disputes over efforts to change existing agree-

ments concerning rates of pay, rules or working condi-

tions—i.e., “major disputes’—and disputes over the in-

terpretation of existing agreements—i.e., “minor dis-

putes.” Consolidated Rail Corp. v. RLEA, 491 US.

(1989), slip op. at 3-5. As relevant here, one essen-

tial difference between the two dispute resolution proce-

dures is that in a major dispute “the parties are obli-

gated to maintain the status quo, and the employer may

not implement the contested change in raves of pay, rules,

or working conditions” until the Act’s bargaining proce-

dures have been exhausted. /d., slip op. at 3-4. In minor

disputes, on the other hand, there is no “general statu-

tory obligation on the part of an employer to maintain

the status quo pending” the resolution of that interpreta-

tion dispute through the Act’s adjustment and then com-

pulsory arbitration process. /d., slip op. at 5.

This petition arises out of rail labor’s efforts to enforce

the Act’s status quo obligation, which the court of appeals

agreed was triggered when the petitioning unions invoked

the Act’s major dispute procedures by serving notices on

respondents under Section 6 of the Railway Labor Act,

45 U.S.C. $ 156, to obtain agreements to deal with the

impact of rail line sales and other transfers of operating

rights on employees. App. A at 9a. Nevertheless, the

lower courts concluded that the carriers did not have

to maintain the status quo in this case because respond-

ents, in defense to rail labor’s suit to enforce the Act’s

status quo obligation, had raised an arguable claim that

they had a contractual right to alter the actual objective

working conditions and practices. That arguable. albeit

disputed, claim of a contractual right, the lower courts

ruled, raised a minor dispute to which the Act’s status

quo obligation did not attach, and thus, the carriers’ ac-

tions, according to the Fourth Circuit, did not violate

the Act’s status quo obligation. App. A at 10a. As we

show below, the validity of the court of appeals’ con-

clusion that a dispute over what actions can be taken

during the status quo period raises a minor dispute, which

in effect relieves the carriers of their status quo obliga-

tion, presents an important question concerning the

proper administration of the Railway Labor Act. In ef-

fect, the court of appeals has eliminated the Act’s status

quo obligation in those cases where this Court has previ-

ously stated that “it is absolutely essential that the status

quo provisions of the Act apply ... if the purpose of the

Act is to be fulfilled.” Detroit & Toledo Shore Line R.R.

v. UTU, 396 U.S. 142, 155 (1969).

A. The Line Transfer Dispute

Our nation’s railroads and rail labor have been em-

broiled in a dispute for the past decade over the manner

in which employees should be treated when a railroad

sells, leases, or otherwise transfers the rail line on which

those employees are working to another operator for

continued rail operations. Rail labor, relying upon its

view of longstanding past practice dating back more than

a half-century, and the equities which employees have

earned by working on the rail lines, has maintained that

a railroad transferring its rail operations should not do

so unless the new operator agrees to allow the employees,

who have the seniority to perform the work being trans-

ferred, to follow their work, with their collective bar-

gaining agreements intact, to the new operator. Rail

labor has also insisted that any employee adversely af-

fected by the transfer should “be made whole.” The

railroads, however, disagree with rail labor’s view of

what is appropriate. Instead, they have maintained that

rail labor should look solely to the Interstate Commerce

Act, 49 U.S.C. £§ 10101, et seg., and to its administration

by the Interstate Commerce Commission [hereinafter,

“TCC” or “Commission”], for whatever benefits that Act

may provide for employees affected by “transactions”

within the ICC’s regulatory jurisdiction, including line

sales, leases or other transfers. Since the ICC has con-

cluded that it will not impose the levels of protection

which rail labor maintains are necessary,‘ rail labor has

attempted to use the Railway Labor Act’s major dispute

procedures to negotiate agreements that would provide by

contract the protections of employee interests that the

railroads and the ICC had long provided before this re-

cent era of deregulation. This case has grown out of

petitioners’ efforts to use the collective bargaining process

to obtain by agreement what the ICC now refuses to pro-

vide by order.

Petitioners’ initial efforts to utilize the Railway Labor

Act’s collective bargaining process were delayed by the

“moratorium clauses” in the agreements reached with most

railroads, including respondents,* during the 1984 round of

4 See, Wilmington Terminal R.R.—Purchase and Lease, 6 1.C.C.2d

799 (1990), petition for review pending, 6th Cir. No. 90-3621; Ex

Parte 292 (Sub-No. 1), Class Exemption for the Acquisition and

Operation of Rail Lines Under 49 U.S.C. 10901, 1 1.C.C.2d 810

(1985), aff'd sub nom. Illinois Commerce Comm. v. ICC, 817 F.2d

145 (D.C. Cir. 1987) (table).

5 Respondents are the Norfolk Southern Corporation [ hereinafter,

“NS” | and three of its subsidiaries or affiliated companies, the

Norfolk & Western Railway Company, Norfolk Southern Railway

Company, and Chesapeake Western Railway [ hereinafter, “N&W,”

“Southern” and “CW,” respectively!. These railroads are operated

as a single rail system, but maintain their separate corporate iden-

tities for certain purposes. Prior to December 31, 1990, respondent

Southern’s name was Southern Railway Company.

“national bargaining.” ° However, once the moratorium

period expired on April 1, 1988, the unions began to serve

Section 6 notices on most of our nation’s railroads, includ-

ing respondents, to negotiate agreements to deal with the

manner in which employees will be affected by line sales,

leases or other transfers. While there was some variation

in the notices, essentially all of the bargaining requests

sought agreements that would provide monetary benefits

to any employee whose income was adversely affected by

the transfer. Also, the majority of the notices asked the

carriers to agree that they would not enter into an agree-

ment to transfer a rail line unless the new operator com-

mitted both to employ the transferring carrier’s employ-

ees who had seniority to perform the work being trans-

ferred and to assume the collective bargaining agreements

applicable to those employees. J.A. at 67-76." Petitioners

6 Most of our nation’s railroads, including respondents N&W and

Southern, bargain “nationally” with most of the labor organizations.

What this means is that the carrier designates a committee com-

prised of the representatives of a few carriers to bargain on its

behalf with one or more rail unions over a particular Section 6

notice. Once that agreement is reached, it typically includes what

is known as a “moratorium clause” which provides that, for a cer-

tain period of time, neither the railroads nor the union will serve a

notice on the other under Section 6 of the Act to change any agree-

ment reached by that National Agreement. The National Agree-

ments which resolved the 1984 Section 6 notices provided that no

Section 6 notice would be served prior to April 1, 1988 for an

agreement that could be effective prior to July 1, 1988, for a sub-

ject resolved by those negotiations.

7 Theye is also another set of Section 6 notices which are involved

in this case. In December 1989, respondents NS and N&W an-

nounced that they would sell and lease over 500 miles of rail lines,

affecting over 400 employees, to a newly-formed railroad, which is

now called the Wheeling & Lake Erie Railway Company |herein-

after, “W&LE”|. Most petitioners served Section 6 notices on the

N&W on January 31, 1990, to negotiate an agreement to deal with

the impact of that sale on employees. After meeting several times

on those notices, the mediatory services of the National Mediation

Board were invoked (J.A. at 322-24), and with the aid of the Board,

all but two of the unions were able to resolve those disputes. Two

disputes, however, remain pending before the Board. 4

served these notices because they recognize that the exist-

ing collective bargaining agreements do not require the

railroads to provide the benefits which their notices seek

to obtain by negotiation.

Respondents and the other railroads met with rail labor

on those notices but maintained that the notices did not

raise an issue over which they must bargain. J.A. at 89-

90. Respondents explained their position by stating that,

in their opinion, the ICC has been given exclusive juris-

diction over rail line transfers and that, consequently,

they “are not required to bargain over Section 6 notices

[such as the ones at bar] ... to the extent those notices

address matters within the ICC’s exclusive jurisdiction,

including, as a general matter, the ‘effects’ of an ICC-

authorized transaction on employees.” J.A. at 90. Re-

spondents never asserted that the unions had waived their

right to bargain because they were already parties to

agreements dealing with line transfers. Indeed, no such

contention could be made because the railroads nationally

maintain that they have never entered into an agreement

protecting employees from line transfers or their effects.

Brief for NRLC at 5-6, as amicus on petition. Sup. Ct.

No. 87-1589, Pittsburgh & Lake Erie R.R. v. RLEA, 491

U.S. —— (1989).

Rail labor’s efforts to resolve all of the issues raised by

the Section 6 notices, including the line transfer dispute,

were unsuccessful and beginning in late 1988 rail labor

and the carriers began to invoke the mediatory services

of the National Mediation Board [hereinafter, “NMB’’]

under Section 5 First of the Railway Labor Act, 45

U.S.C. $ 155 First, to help resolve the disputes raised by

the Section 6 notices. Mediation on those notices, includ-

ing on the line sale dispute, also proved to be fruitless,

in part because, as respondents informed the district

court, their representative in that “bargaining”? was “not

bargaining with the unions with respect to the provisions

in the section 6 notices that address dispositions of rail

lines....” J.A. at 155. Indeed, meaningful negotiations

on this issue never occurred (J.A. at 274-75), and on

April 5, 1990, the NMB released most, but not all of the

petitioners from its mediatory jurisdiction. J.A. at 318.°

Before the Act’s status quo period expired, however,

the President created an Emergency Board on May 3,

1990, under Section 10 of the Act, 45 U.S.C. § 160, to

investigate the disputes raised by the Section 6 notices,

including the line transfer dispute. Executive Order No.

12,714, 55 Fed. Reg. 19047 (May 8, 1990). That Board

has heard evidence on the disputes, including the line

transfer dispute, and is currently scheduled to issue its

report to the President on January 15, 1991.°

B. The Status Quo Dispute

In February 1988, respondents adopted a plan to shed

1,200 miles of rail lines, which were only marginally

profitable, from their 17,000 mile rail system. J.A. at

238. This plan, called the “Thoroughbred Shortline” pro-

gram, contemplated leasing these marginal lines to small

railroads or newly-formed carriers. Those leases were to

be for long terms, usually twenty (20) years, with the

rent calculated to generate a payment of the net liquida-

tion value of the line over the term of the lease, with a

profit equal to the return on investment which NS seeks

to obtain from all of its lines—approximately 11% an-

nually. J.A. at 238. Additionally, in order to continue

to receive traffic from these lines, NS offers the lessee a

8’ One petitioner, the International Association of Machinists and

Aerospace Workers [hereinafter, “IAM” ] was not released and is

still in mediation. See, J.A. at 327-28.

® Although tlhe status quo for most petitioners will expire thirty

(30) days after that report is issued, unless Congress modifies Sec-

tion 10 of the Act as it applies to these disputes, this case will not

be moot because the IAM is still in mediation, two organizations are

still in mediation on their Section 6 notices served in connection

with the W&LE sale (see, note 7, supra) and rail labor has sought

make-whole relief for the past violations. J.A. at 38-39.

ee |

credit for each car received from the line so that the line

will be rent-free if the lessee produces traffic equal to

that which was obtained from the line while it was part

of the NS system. J.A. at 238-39. No Thoroughbred

transfer occurred prior to April 1988 when the first line

transfer Section 6 notice was served on respondents.

When respondents began to implement the Thorough-

bred Shortline program after the unions had served their

Section 6 notices on line transfers, and also engaged in

two intracorporate transfers of operating rights,'® without

first resolving the line transfer dispute, petitioners filed

a complaint with the United States District Court for the

Eastern District of Virginia to challenge those transfers,

invoking the district court’s jurisdiction under 28 U.S.C.

$ 1337(a). Petitioners,’ asserting in part that those line

transfers violated respondents’ status quo obligation

under the Railway Labor Act, sought both declaratory

and injunctive relief. As relevant here, petitioners asked

the Court to declare that respondents violated the Act’s

status quo command by transferring its lines and operat-

ing rights during the bargaining period.’* Petitioners

1? One intracorporate transaction occurred in April 1989, when

respondent Southern transferred a portion of its rail lines to CW, a

wholly-owned subsidiary of N&W. Unlike Southern’s employees,

most of respondent CW’s employees are not covered by collective

bargaining agreements. J.A. at 31-32. The second intracorporate

transaction involved the grant of trackage rights by South rn to the

N&W so that the N&W could perform a service which Southern had

asked its operating employees to perform, but could not perform un-

less the unions agreed to modify their contracts. When one of the

operating unions declined to modify the collective bargaining agree-

ment, NS assigned the work to N&W which had obtained the neces-

sary contract modifications. J.A. at 33.

11 The complaint, which was filed in August 1989, was amended in

December of that year to simplify the issues and to delete several

labor organizations which are members of RLEA, but do not repre-

sent NS employees.

12 Petitioners, also challenged respondents intracorporate transac-

tions as being actions that, collectively, violated Sections 2 Third,

also asked the court to order respondents both to restore

the status quo to the maximum extent practical and to

make whole the employees who were improperly affected.

J.A. at 37-39.

Respondents defended against that suit by filing a

counterclaim which, in part, sought a declaration that the

dispute over whether respondents could transfer rail lines

during the bargaining process raised a minor dispute

subject to the exclusive jurisdiction of the Railway Labor

Act’s adjustment boards. J.A. at 59. To support that

assertion, respondents NS, N&W and Southern claimed

that they were parties to collective bargaining agreements

with the petitioning unions which “recognized” their

right to engage in sales, leases, and other dispositions of

rail lines. J.A. at 56-57. Respondents next stated that

since the unions’ status que claim disputed that right, the

dispute raised by the complaint must be one over the

interpretation of their contractual rights. J.A. at 57-58.

Relying upon that view of their contractual rights,

respondents moved for summary judgment and supported

their assertion as to their “right” to transfer rail lines

by referring the court to provisions in the collective bar-

gaining agreements dealing with the manner in which

they may reduce forces. Respondents also asserted that

their claim of a contractual right to transfer lines was

supported by a past practice, which the unions disputed,

of abandoning and engaging in other sales and leases

without first bargaining under the Railway Labor Act.

See, App. E at 48a-46a.

C. Rulings By The Lower Courts

On February 16, 1990, the district court entered an

order granting respondents’ motion for summary judg-

ment on part of the litigation, concluding that the court

lacked subject matter jurisdiction over rail labor’s com-

Seventh, and Ninth of the Railway Labor Act, 45 U.S.C. §$ 152

Third, Seventh, and Ninth. J.A. at 34-35.

———————————————————

plaint."* App. B at 13a. As the court explained in both

its oral ruling of February 16, 1990 (App. C at 15a) and

its written opinion (App. E at 32a) which was entered

on June 13, 1990, the dispute over what actions respond-

ents could take during the bargaining process was a

“minor dispute because it is arguably capable of being

conclusively resolved by interpreting the existing agree-

ments, either expressed or implied.” App. C at 17a-18a;

see also, App. E at 40a-49a. According to the district

court (42a-44a; footnote omitted) :

In none of these agreements [7.e., the written collec-

tive bargaining agreements] is there any restriction

on the right of the carrier to sell, lease, abandon, or

grant trackage rights over its rail lines. Nor do the

agreements obligate NS, NW, or Southern to require

that a purchaser or lessee of a rail line assume the

parties’ existing collective bargaining agreements, or

hire the carriers’ employees. Rather, recognizing that

a carrier’s discontinuance of operations may cause

jobs and work assignments to be eliminated or re-

duced and employees to be reassigned to different

positions, the agreements include provisions, in vari-

ous forms, explicitly reserving to NS, NW and South-

ern the flexibility to abolish jobs and furlough employ-

ees as a result of a sale, lease, abandonment, or other

disposition of a rail line. Thus, NS, NW, and South-

ern may unilaterally abolish positions and furlough

employees subject only to the limited constraints pre-

scribed in the agreements.

13 Respondents’ counterclaim also sought injunctive relief to pre-

vent rail lak » from striking. J.A. 62-63. The district court did

not rule on that request in February, but rather, asked the parties

to file additional briefs on that issue. App. C at 26a. Rail labor

responded that the unions had no intentions of striking over the

line transfers in light of the court’s ruling, and on May 15, 1990,

the court issued an order denying the request for injunctive relief

because no strike was imminent, but noted that respondents could

seek such injunctive relief, “{s|hould circumstances change... .”

App. D at 3la.

The court then added that its conclusion that this case

presented a minor dispute meant that it lacked jurisdic-

tion over rail labor’s complaint to enforce the Railway

Labor Act. App. B at 13a."

Rail labor’s efforts to use the Railway Labor Act’s bar-

gaining procedures to change those agreements to limit

the carriers’ flexibility by adding specific provisions deal-

ing with line transfers, including an obligation requiring

respondents to refrain from transferring a rail line un-

less the new operator has agreed to hire the affected

employees and assume their collective bargaining agree-

ments, did not, in the district court’s opinion, freeze that

flexibility. This was so, the district court said, because

the service of a Section 6 notice does not transform a

minor dispute into a major dispute. App. E at 49a.

Petitioners noted appeals from the district court’s rul-

ings to the Fourth Circuit, invoking the court of appeals’

jurisdiction under 28 U.S.C. § 1291.% On September 17,

1990, the Fourth Circuit issue its decision dismissing the

appeals, in part, as moot,’* and affirming the lower court’s

14 As an alternative basis for its ruling that it lacked jurisdiction

over rail labor’s complaint, the district court held that the ICC

“has exclusive jurisdiction over those transactions authorized and

conducted pursuant to 49 U.S.C. § 11348” (App. B at 13a), which

included most, but not all, of the line transfers at issue. See, App.

E at 53a-57a. The court of appeals did not reach that issue. App. A

at 10a n.7.

'5 Petitioners treated the district court’s order of May 15, 1990

(see, App. D at 28a) as finally resolving this case and on May 17,

1996, noted an appeal pursuant to 28 U.S.C. § 1291, or alternatively,

pursvant to 28 U.S.C. § 1292(a) (1). J.A. at 382. The issue as to

the dnality of the district court’s order was mooted when the dis-

trict court issued a judgment on July 3, 1990 (App. F at 60a) and

petitioners filed another notice of appeal pursuant to 28 U.S.C.

$1291. That second appeal was consolidated with the first. App. A

at 6a n.2.

1 The court of appeals concluded that the unions’ challenge to

the denial of their requests for injunctive relief to prevent the

judgment in all other respects. Rail labor, the appellate

court ruled, was correct in asserting that the unions’ Sec-

tion 6 notices raised a major dispute, and that, “[ale-

cordingly, the railroad must maintain the status quo dur-

ing those negotiations ....” App. A at 9a. However,

the court then added that rail labor’s efforts to enforce

that status quo were illfounded because (App. A at Qa-

10a; emphasis in original) :

The Achilles’ heel of the Unions’ argument [that re-

spondents violated the Act’s status quo obligation] is

that the railroad’s actions are “arguably justified”

by the existing agreement. The service of a £ 6 notice

and the beginning of bargaining over the proposed

changes does not convert a minor dispute into a

major one. . . . Therefore, the railroad’s sales do

not alter the status quo in violation of the RLA.

This petition has followed.

REASONS FOR GRANTING THE WRIT

This case presents an important question concerning

the proper relationship between the Railway Labor Act’s

major and minor dispute resolution procedures which

has not been addressed directly by this Court, but needs

to be because of the confusion which now exists among

the circuits. That confusion, and indeed the need for

this Court to review this issue, is evident here, for the

Fourth Circuit has decided this important question—i.e.,

whether a carrier’s arguable, but disputed, claim of a

contractual right to alter the status quo while bargain-

ing over a major dispute relieves that carrier of the

Act’s status quo obligation—in a way that conflicts with

the decisions of this Court in Consolidated Rail Corp. v.

RLEA hereinafter, “Conrail’’|, 491 U.S. (1989)

and Detroit & Toledo Shore Line R.R. v. UTU {herein-

after, “Shore Line’’|, 396 U.S. i42 (1969), and in a way

W&LE and other sales that were consummated before review could

be had, was moot. App. A at 6a.

that aggravates the conflict that currently exists among

the circuits as to the proper relationship between the two

dispute resolution schemes.

i. WHETHER OR NOT THE STATUS QUO OBLIGA-

TION APPLIES IN A MAJOR DISPUTE, WHERE

ONE OF THE DISPUTANTS CLAIMS A CONTRAC-

TUAL RIGHT TO ALTER THE STATUS QUO, PRE-

SENTS AN ISSUE WHICH IS IMPORTANT TO THE

ORDERLY ADMINISTRATION OF THE RAILWAY

LABOR ACT

Efficient and uninterrupted rail and air transportation

are obviously important to the economy of this country,

and the proper interpretation of the Railway Labor Act,

45 U.S.C. § 151, et seg., is important to achieving those

goals.'* That Act, Which until recently has been so suc-

cessful in enabling this nation to achieve efficient and

uninterrupted transportation, kas accomplished this by

providing mechanisms to resolve labor disputes before

those disputes reached the point that self-help was the

only way left to settle the controversy. As relevant here,

that Act achieved these goals by providing different pro-

cedures to resolve disputes over rates of pay, rules, or

working conditions, depending upon whether the dispute

is one over changes to existing agreements—i.e., “major

disputes’”—or one over the proper interpretation of exist-

ing agreements—i.e., “minor disputes”. Conrail, slip op.

at 3-8.

When labor and management proposed what became

the Railway Labor Act in 1926, they recognized that the

“only kind of a dispute wherein there is any danger of

an interruption of commerce by a change of the condi-

tions by, for example, a strike is a dispute where there

is a change sought in the existing rules and working con-

ditions.” Hearings on H.R. 7180, before House Commit-

‘7 The Railway Labor Act applies to rail and air carriers. 45

U.S.C. $$ 151 First, 181.

ania ai

tee on Interstate and Foreign Commerce, 69th Cong., 1st

Sess. at 93 (1926) (Statement of D.R. Richberg). Con-

gress obviously agreed with this observation, and _ it

adopted the proposed legislation which sought to prevent

such a dispute from reaching the state that commerce

was threatened, by providing a detailed procedure de-

signed to enable the parties to resolve that dispute by

meaningful collective bargaining; that process calls upon

the government to aid the parties in resolving their dis-

pute by mediation, but not compulsion, and, indeed as oc-

curred here, may involve even the President of the

United States in the process. 45 U.S.C. §$ 160. This Act

not only requires the parties “to exert every. reasonable

effort” to resolve their disputes, but it also imposes as

an integral part of that bargaining process the obliga-

tion—1.e., the status quo requirement—that no party will

change “‘the conditions out of which the dispute arose”

until the bargaining process is exhausted.

As this Court observed in Shore Line, the “‘Act’s status

quo requirement is central to its design.” 396 U.S. at

150. Indeed, it was the agreement of both labor and

management in 1926 that both sides would “wait {before

making a change] and give the Government full oppor-

tunity to adjust the controversy,” '’ that is both the es-

sence of the “compromise” enacted in 1926 and the

strength of the Act’s major dispute resolution process.

That compromise—the status quo obligation—makes the

economic strength of the parties virtually irrelevant by

substituting as the primary bargaining leverage the

ability of the party opposing the change to delay the

other‘s implementation of the change in existing working

conditions pending an agreement. 396 U.S. at 150.

18 45 U.S.C. § 160.

19 Hearings on 8.2306, Before Senate Committee On Interstate

Commerce, 69th Cong., Ist Sess. at 89 (1926) (Statement of D.R.

Richberg).

Consequently, the proper interpretation and applica-

tion of the Act’s status quo obligation is crucial to the

effective administration of this important labor statute.

This Court addressed the scope of the status quo be-

fore in Shore Line and concluded that the “obligation of

both parties during a period in which [the Act’s status

quo command] ... is properly invoked is to preserve and

maintain unchanged those actual, objective working con-

ditions and practices, broadly conceived, which were in

effect prior to the time the pending dispute arose and

which are involved in or related to that dispute.” 396

U.S. at 152-53 (footnote omitted; emphasis added).

That obligation, as this Court noted in Shore Line and

recently reiterated in Pittsburgh & Lake Erie R.R. v.

RLEA, 491 USS. (1989), slip op. at 13-14 n.15, re-

quires a carrier to do more during the status quo period

than merely continue to honor its express and implied

agreements. Rather, that obligation looks past the agree-

merts to the actual, objective working conditions and

practices and requires the carrier to preserve and main-

tain unchanged those relevant, objective working condi-

tions “regardless of the fact that the railroad was not

precluded from making |such changes] ... under the

existing agreements” (396 U.S. at 154), either express

or implied. While this Court observed in Pittsburgh &

Lake Erie that Shore Line extended the status quo lan-

guage “‘to its outer limits” (slip op. at 13), this Court

did not overrule Shore Line.*°

“0 Petitioners have recently filed a petition for a writ of certiorari

which presents important questions concerning the scope of the

Act’s bargaining and status quo obligations in line transfer cases.

Sup. Ct. No. 90-991, RLEA v. Chicago & North Western Transpor-

tation Co. That case also raises a question as to the relationship

between the major and minor dispute resolution process which is

comparable, but not identical, to that presented by this petition.

Petitioners submit that if this Court were to issue the writ in No.

90-991, and also issue the writ here, the two cases should be con-

solidated for briefing and argument.

eS ee

In this case, however, the court of appeals has effec-

tively eliminated the status quo obligation in the type of

case involved in Shore Line by equating a dispute over

what actions could be taken during the status quo period

with a “minor” dispute. Here, the Fourth Circuit con-

cluded that the “dispute [raised by the unions’ Section 6

‘ notices] over prospective contract rights is major” and

that the carriers “must maintain the status quo during

those negotiations ....” App. A at 9a. That vequire-

ment, nevertheless, was then rendered meaningless when

the court concluded that since respondents had raised an

arguabie right to alter the status quo, they had the right

to make that change because the status quo obligation

did not apply to that change—.e., the service of a Sec-

tion 6 notice “does not convert a minor dispute into a

major one.’ /d. In other words, the Fourth Circuit has

modified the status quo obligation as it applies in that

circuit to now provide that whenever the status quo obli-

gation is properly invoked the parties must maintain un-

changed the actual, objective conditions unless the car-

rier raises simply an arguable contractual right to make

the change. App. A at 7a-8a. Unfortunately, that mod-

ification of this broad and crucial obligation applies to

those situations where the status quo obligation is most

meaningful and necessary.

As this Court observed in Conrail, slip op. at 10 n.7,

“the general framework of a collective-bargaining agree-

ment leaves some play in the joints, permitting manage-

ment some range of flexibility in responding to changed

conditions.”” Here, respondents relied upon that “flexi-

bility” to argue that they had a contractual right to

make the contested changes (App. E at 42a-43a) and

rail labor served the Section 6 notices to limit that flex-

ibility by asking to have included within the agreements

specific provisions to deal with line transfers and their

impact on employees. A comparable situation was pre-

sented by Shore Line, for in that case the union sought

to limit the carrier’s flexibility to make certain changes

by including under the express coverage of the agreement

a subject matter that, as here, had previously been left to

the carrier’s discretion. 396 U.S. at 154-55. Neverthe-

less, according to the Fourth Circuit there is no status

quo requirement when, as occurred in Shore Line, a

union seeks to place under the agreement a working con-

dition over which the carrier enjoys flexibility. But, as

this Court observed in Shore Line (396 U.S. at 155):

When the union moves to bring such a previously un-

covered condition within the agreement, it is abso-

iutcly essential that the status quo provisions of the

Act apply to that working condition if the purpose

of the Act is to be fulfilled.

Petitioners respectfully submit that the question of

whether the Fourth Circuit was correct in eliminating

the status quo requirement in cases where this Court

has previously stated its proper application is ‘‘abso-

lutely essential,’ raises an important issue and, as we

show below, needs to be resolved by this Court.

II. THIS COURT SHOULD RESOLVE TINS QUESTION

BECAUSE THE FOURTH CIRCUIT HAS DECIDED

THIS IMPORTANT ISSUE IN A WAY THAT CON-

FLICTS WITH RELEVANT DECISIONS BY THIS

COURT

Although this Court has not directly addressed the

question presented by this petition, it has previously con-

sidered in both Conrail and Shore Line the relationship

between the Railway Labor Act’s major and minor dis-

pute resolution procedures and the scope of the Act’s

status quo obligation. Those decisions, petitioners sub-

mit, provide the framework by which this question

should be resolved. But, as the Fourth Circuit’s failure to

grasp the proper relationship between the two dispute

resolution procedures shows, the lower courts need fur-

ther guidance from this Court on this important issue in

orJer to insure that the Act’s procedures are applied

properly.

This Court addressed one aspect of this question in

Conrail and concluded that in a case where the carrier

asserts an arguable claim that the ‘parties’ agreement

gives the employer the discretion to make a particular

change in working conditions without prior negotiation,

. . . the employer may make the change and the courts

must defer to the arbitral jurisdiction of the [Adjust-

ment] Board.” Slip op. at 11. It is that principle on

which the court of appeals relied to hold that since re-

spondents had presented an arguable claim of a contrac-

tual right to change working conditions, they could do

so during the Act’s major dispute process without vio-

lating the Act’s status quo obligation. App. A at 9a-10a.

However, in relying upon Conrail, the Fourth Circuit

gave no consideration whatsoever to the fact that neither

party in Conrail had invoked the Act’s bargaining or

status quo obligation through the service of a Section 6

notice, and, indeed, the question presented for resolution

in that case was whether the carrier’s proposed changes

had triggered the Act’s bargaining and status quo obli-

gations. See, slip op. at 5-6 n.5. In this case, the court

of appeals acknowledged that the unions had served valid

Section 6 notices and had invoked the Act’s status quo

requirement. App. A at 9a.

Conrail, we submit, must be read in light of Shore

Line, a case where this Court addressed the scope of the

status quo, for in that case it was conceded that the Act’s

bargaining and status quo obligations had been properly

invoked. 396 U.S. at 153, 158. In that case, this Court

held that the status quo obligation was broad and was to

be applied by looking to the actual, objective manner in

which the parties had acted, and not, as the dissent

argued, by looking to their contractual understandings.

396 U.S. at 160 (Harlan, J., dissenting). That principle,

if applied here, as petitioners submit it should have been,

would invalidate the Fourth Circuit’s ruling.

However, Shore Line is not quite on “all fours,” for

in that case the union’s assertion that the contracts pro-

hibited the carriers from making the disputed change

had been submitted to an adjustment board and that

board had ruled that there was “nothing in the rules of

agreement which precludes this carrier from establish-

ing an outside assignment’’—.e., the disputed change.

396 U.S. at 146 n.9, quoting adjustment board award.

This case is comparable, for rail labor has never argued

that the existing agreements preclude the line transfers;

rather, petitioners assert that the agreements are silent

on this point, an assertion similar to the factual situa-

tion presented in Shore Line. Consequently, the issue

which must be addressed in this case, but which was not

addressed by the Fourth Circuit, is whether the fact that

respondents claim an arguable contractual right to make

the disputed change, makes Shore Line inapplicable and

Conrail controlling—i.e., does that claim relieve respond-

ents of the status quo obligation that was triggered by

the unions’ Section 6 notices.

Since this issue is so important to the orderly admin-

istration of the Railway Labor Act for both the rail

and airline industries, this Court, petitioners submit,

should accept this opportunity to resolve this pressing

issue.

III. THIS COURT SHOULD RESOLVE THIS QUESTION

BECAUSE THE FOURTH CIRCUIT HAS DECIDED

THIS ISSUE IN A WAY THAT CONFLICTS WITH

DECISIONS BY OTHER CIRCUITS AND ADDS

FURTHER CONFUSION TO AN UNSETTLED

AREA OF THE LAW

This issue, namely the relationship of a claimed con-

tractual right to the Railway Labor Act’s status quo re-

quirement, is not something that has sprung up over-

night. Rather, it has been a subject of contention for

decades, but unfortunately, it is now further from being

resolved by the circuits than ever before.

In Rutland Ry. v. BLE, 307 F.2d 21 (2d Cir. 1962),

cert. denied, 372 U.S. 954 (1963), a divided panel of the

Second Circuit concluded that, in a situation where a

carrier relied upon an arguable, but disputed, contractual

right to take the challenged action while a dispute raised

by the union’s Section 6 notice was pending, the carrier

could implement the change because the case presented

a minor dispute. Justice Marshall, then a member of

that court, dissented and stated as follows concerning his

views as to the proper interpretation of the Act’s status

quo obligation where the carrier claims an arguable con-

tractual right to alter the status quo (307 F.2d at 44-45

n.11):

[T]he preferable view is that changes in existing

conditions which are the subject of a major dispute

are forbidden whether or not they are arguably au-

thorized by the collective agreement. The “freeze”

provisions carefully avoid reference to the collective

agreement, but emphasize ‘‘working conditions” (Sec-

tion 6), “established practices” (Section 5), and

“conditions out of which the dispute arose” (Section

10). This is in contrast to other parts of the Act,

and, indeed, Section 6 itself, which refer directly to

the “agreement” when necessary. Moreover, the leg-

islative history of the statute shows the “freeze” pro-

visions were intended to enforce a “‘cooling off” period

upon both labor and management in the railroad in-

dustry. ... But this policy cannot be effectuated if

management is allowed to take advantage of an am-

biguous contract during the “freeze” to make changes

in working conditions relating to the dispute. Such

an action is far more likely to warm up the dispute

than cool it off.

Justice Marshall’s view of the Act, which petitioners

submit became the view of this Court in Shore Line, does

not stand alone among the circuits, for the District of

Columbia Circuit adopted a similar approach to the Act

in Southern Ry. v. Brotherhood of Locomotive Firemen,

337 F.2d 127 (D.C. Cir. 1964). In that case, the courts

accommodated the two dispute resolution procedures by

enjoining the carrier from altering the status quo until

either it completed the bargaining process or received

an adjustment board award upholding its contract inter-

pretation. As the court stated (337 F.2d at 132):

|T|he injunction |preserving the status quo]

must forbid also a change in the long-standing inter-

pretation in this respect which had been given by the

parties to the existing contract. To allow a change

in the construction of the contract in the way sought

here would in substance and effect change the con-

tract itself, as acted upon and applied by the parties

from the beginning. As the District court said, to

permit this would subvert the purpose and intent of

Section 6 of the Act.

Subsequent appellate court decisions have recognized

that a dispute over what actions a carrier may take dur-

ing the Act’s status quo period should not be viewed as

“converting” what is actually a major dispute into a

minor one. E.g., RLEA v. Chicago & North Western

Transportation Co., 890 F.2d 1024, 1026 (&th Cir.

1989), cert. denied, 110 S.Ct. 3237 (1990); United In-

dustrial Workers v. Board of Trustees, 351 F.2d 183,

189 (5th Cir. 1965). But, recently, the circuits have lost

sight of the reason why a carrier may alter the status

quo in a minor dispute—i.e., because the Act’s status quo

obligation is not triggered—and have begun to rely upon

certain catchy phrases *' to conclude that in a case where

the union has served a valid Section 6 notice, a carrier’s

reliance upon a disputed contractual right to alter the

status quo during that bargaining makes the controversy

over the changes during the status quo period a minor

dispute to which the Act’s status quo does not apply.

However, as petitioners explained in their petition for

a writ of certiorari on a comparable question in Sup. Ct.

“1 For example, in CSX Transportation, Inc. v. UTU, 879 F.2d

990, 1000 (2d Cir. 1989), cert. dented, 110 S.Ct. 720 (1990), the

Second Circuit stated that the service of a Section 6 notice “would

have no transforming or alchemizing effect upon” the characteriza-

tion of a dispute as being minor.

No. 90-991, RLEA v. Chicago & North Western Trans-

portation Co., filed December 19, 1990 (see note 20,

supra), the circuits are hopelessly at odds over the im-

pact which a claimed contractual right to alter the status

quo during the bargaining process has on the bargaining

process itself. In the Second ** and Third ** Circuits, the

contractual right claim trumps the bargaining and status

quo obligations totally. In the Fourth Circuit, as this

case shows, that claim eliminates the status quo obliga-

tion, but not the bargaining requirement. In the Seventh

Circuit, ** that claim eliminates the union’s right to exer-

cise self-help, even after the bargaining process is com-

pleted. And in the Eighth Circuit, *° claims identical to

those raised in each of the above cases do not raise a

minor dispute or in any other way affect the major dis-

pute process.

Petitioners respectfully submit that there is no con-

sistent rationale which can explain these conflicting deci-

sions. Indeed, the validity of this assertion that the cir-

cuits are hopelessly confused may be seen graphically

from a review of the various explanations given by the

judges on the United States Court of Appeals for the

District of Columbia Circuit explaining their votes on a

petition for en banc consideration in ALPA v. Eastern

Air Lines, Inc., 863 F.2d 891 (D.C. Cir. 1988), en banc

denied (1989), cert. pending, Sup. Ct. No. 88-1403.

This Court, petitioners respectfully submit, should ac-

cept review of this case and resolve this important issue.

*2CSX Transportation, Inc. v. UTU, supra note 21.

23 General Committee of Adjustment v. CSX R.R., 893 F.2d 584

(3rd Cir. 1990).

“4 Chicago & North Western Transportation Co. v. RLEA, 908

F.2d 144 (7th Cir. 1990), pet. for cert. pending, Suv. Ct. No. 90-991;

see, note 20, supra.

*> RLEA v. Chicago & North Western Transportation Co., supra.

CONCLUSION

This Court should grant the writ.

Date: January 15, 1991

Respectfully submitted,

WILLIAM G. MAHONEY

JOHN O’B. CLARKE, JR.*

HIGHSAW, MAHONEY

& CLARKE, P.C.

Suite 210

1050 17th Street, N.W.

Washington, D.C. 20036

(202) 296-8500

Attorneys for Petitioners

* Counsel of Record

APPENDICES

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 90-2677

; exeeeenmenemeeme

RAILWAY LABOR EXECUTIVES’ ASSOCIATION; AMERICAN

RAILWAY & AIRWAY SUPERVISORS ASSOCIATION; AMERI-

CAN TRAIN DISPATCHERS ASSOCIATION; BROTHERHOOD

OF LOCOMOTIVE ENGINEERS; BROTHERHOOD OF MAINTE-

NANCE OF WAY EMPLOYEES; BROTHERHOOD OF RaAIL-

ROAD SIGNALMEN; BROTHERHOOD OF RAILWAY CARMEN ;

INTERNATIONAL ASSOCIATION OF MACHINISTS & AERO-

SPACE WORKERS; INTERNATIONAL BROTHERHOOD OF

BOILERMAKERS AND BLACKSMITHS; INTERNATIONAL

BROTHERHOOD OF ELECTRICAL WORKERS; INTERNATIONAL

BROTHERHOOD OF FIREMEN AND OILERS; SHEET METAL

WORKERS INTERNATIONAL ASSOCIATION; TRANSPORTA-

TION COMMUNICATIONS INTERNATIONAL UNION; RAIL-

ROAD YARDMASTERS OF AMERICA; UNITED TRANSPORTA-

TION UNION,

Plaintiffs-A ppellants,

and[*]

HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTER-

NATIONAL UNION; INTERNATIONAL LONGSHOREMEN’S

ASSOCIATION; NATIONAL MARINE ENGINEER’S ASSOCIA-

TION; SEAFARERS INTERNATIONAL UNION OF NORTH

AMERICA; TRANSPORT WORKERS UNION OF AMERICA,

Plaintiffs,

versus

2 rt en ae es a ee A

[* On December 20, 1990, the Fourth Circuit issued an order

amending the captions to read as reproduced herein. Prior to that

amendment, the captions aligned the first group of unions against

all of the other named organizations and carriers. |

or} fcsomnrennr ann

CHESAPEAKE WESTERN RAILWAY; SOUTHERN RAILWAY

COMPANY; NORFOLK & WESTERN RAILWAY COMPANY;

NORFOLK SOUTHERN CORPORATION,

Defendants-A ppellees,

and

CAROLINA COASTAL RAILWAY, INCORPORATED,

Defendant.

No. 90-2697

RAILWAY LABOR EXECUTIVES’ ASSOCIATION; AMERICAN

RAILWAY & AIRWAY SUPERVISORS ASSOCIATION ; AMERI-

CAN TRAIN DISPATCHERS ASSOCIATION; BROTHERHOOD

OF LOCOMOTIVE ENGINEERS; BROTHERHOOD OF MAINTE-

NANCE OF WAY EMPLOYES; BROTHERHOOD OF RaAIL-

ROAD SIGNALMEN; BROTHERHOOD OF RAILWAY CARMEN;

INTERNATIONAL ASSOCIATION OF MACHINISTS & AERO-

SPACE WORKERS; INTERNATIONAL BROTHERHOOD OF

BOILERMAKERS AND BLACKSMITHS; INTERNATIONAL

BROTHERHOOD OF ELECTRICAL WORKERS; INTERNATIONAL

BROTHERHOOD OF FIREMEN AND OILERS; SHEET METAL

WORKERS INTERNATIONAL ASSOCIATION; TRANSPORTA-

TION COMMUNICATIONS INTERNATIONAL UNION; RAIL-

ROAD YARDMASTERS OF AMERICA; UNITED TRANSPORTA-

TION UNION,

Plaintiffs-Appellants,

and|[*]

HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTER-

NATIONAL UNION; INTERNATIONAL LONGSHOREMEN’S

ASSOCIATION; NATIONAL MARINE ENGINEER’S ASSOCIA-

TION; SEAFARERS INTERNATIONAL UNION OF NORTH

AMERICA; TRANSPORT WORKERS UNION OF AMERICA,

Plaintiffs,

versus “

[ See note * on page la. |

CHESAPEAKE WESTERN RAILWAY; SOUTHERN RAILWAY

COMPANY: NORFOLK & WESTERN RAILWAY COMPANY;

NORFOLK SOUTHERN CORPORATION,

Defendants-A ppe'lees,

and

CAROLINA COASTAL RAILWAY, INCORPORATED,

Defendant.

Appeals from the United States District Court

for the Eastern District of Virginia, at Alexandria

T.S. Ellis, II], District Judge. (CA-89-1157-A)

Argued: July 16, 1990 Decided: September 17, 1990

Before RUSSELL, WIDENER, and HALL, Circuit Judges.

Affirmed in part and dismissed in part by published opin-

ion. Judge Hall wrote the opinion, in which Judge Russel!

and Judge Widener joined.

ARGUED: John O’Brien Clarke, Jr.. HIGHSAW, MA-

HONEY & CLARKE, P.C., Washington, D.C., for Appel-

lants. Jeffrey Stephen Berlin, RICHARDSON, BERLIN

& MORVILLO, Washington, D.C., for Appellees. ON

BRIEF: David J. Strom, HIGHSAW, MAHONEY &

CLARKE, P.C., Washington, D.C., for Appellants. Mark

Ek. Martin, RICHARDSON, BERLIN & MORVILLO,

Washington, D.C.; William P. Stallsmith, Jr., Norfolk,

Virginia, for Appellees.

HALL, Circuit Judge:

The Railway Labor Executives’ Association and several

other railroad labor unions (“Unions’} appeal an order

of the district court granting summary judgment dis-

missing the Unions’ action against Norfolk Southern

Railway Co. and some of its subsidiaries (“NS”) seek-

ing declaratory and injunctive relief under the Railway

Labor Act (“RLA”), 45 U.S.C. $$ 151, et seg. We dis-

miss the appeal in part as moot, and affirm in al! other

respects.

This case arises from the displacement of railroad

workers by the sale and lease of certain railroad lines

by NS.

In October 1987, NS identified 2,700 miles of its sys-

tem that were unprofitable. 1,500 miles had no poten-

tial for profitability and were slated for abandonment:

the remaining 1,200 marginally-profitable lines were to

be sold or leased to “short line’ operators—small rail-

roads that could operate the lines more economically than

NS. As of late May 1990, approximately 810 miles had

been transferred under this program. In each instance,

the transferee short-line railroad operates the line with

its own employees.

All of the transfers are subject to the jurisdiction of

the Interstate Commerce Commission (“ICC”). Where

the transfer is to an operating ICC-regulated “carrier,”

the ICC authorization is issued under 49 U.S.C. § 11343.

In these transactions, the ICC must mere certain “em-

ployee protective conditions.” 49 U.S.C. $ 11347.' On the

other hand, transfers to entities that ins not before

been “carriers” under the ICC are governed by 49 U.S.C.

§ 10901; no employee protective measures are generally

imposed. A key transaction at issue in this case is of

this latter type—550 miles of lines sold by NS to Wheel-

ing & Lake Erie Railway Co. (W&LE), a newly-formed

corporation.

The Unions filed this action on August 4, 1989, and

amended their rye aon December 12, 1989. The com-

plaint challenged NS’ authority to transfer lines without

1 These conditions include up to six years of wage protection.

bargaining under the RLA. The Unions sought declara-

tory relief that bargaining was required and injunctive

relief prohibiting further transfers until bargaining was

complete. On December 19, NS answered the complaint

and counterclaimed for a declaratory judgment that the

dispute is “minor” under the RLA and for an injunction

prohibiting the Unions from striking over the dispute.

The parties filed cross-motions to dismiss and/or for

summary judgment. On February 16, 1990, after hear-

ing argument, the district court entered an order grant-

ing NS summary judgment on its declaratory judgment

claim and dismissing the Unions’ complaint, and noted

that an opinion would be forthcoming.

The February 16 order did not dispose of NS’ request

for a strike injunction, and on March 12, the Unions

filed a competing motion to enjoin the then-pending sale

of 550 miles of track to W&LE. This motion sought to

preserve the status quo until the completion of arbitra-

tion of the Unions’ claims (the mandatory remedy for

“minor” disputes under the RLA). On May 15, the dis-

trict court denied the Unions’ motion. It further denied

NS a strike injunction because a strike was not then

threatened, but without prejudice to a renewal of the

motion should circumstances change. On May 17, the

Unions filed their notice of appeal, and the district court

denied their motion to enjoin consummation of the W&LE

transaction pending appeal. Undaunted, the Unions made

an “emergency motion” for injunction pending appeal to

this court on May 18. The emergency motion was de-

nied, but consideration of this appeal was expedited. The

W&LE transaction had actually already been completed

on May 17.

II.

NS has moved to dismiss the appeal. In part, NS

argues that the Unions’ claim for injunctive relief against

the W&LE tramsaction was mooted by its occurrence.”

2NS also initially argued that because its request for a strike

injunction could still be renewed in the district court, and because

The Unions’ complaint is a broad attack on NS’ en-

tire policy of transferring lines without bargaining, and

requests injunctive relief against any such transfers. In

its motion to dismiss the appeal, however, NS argues

that, as regards any transaction (such as the sale to

W&LE) that has been completed, the Unions’ request for

injunctive relief is moot. We agree. An appeal of the

denial of an injunction to prohibit an act is rendered

moot by the happening of the act. Seafarers Int’l Union

v. National Marine Services, Inc., 820 F.2d 148 (5th

Cir.), cert. denied, 484 U.S. 953 (1987); IBTCWHA v.

Western Airlines, Inc., 854 F.2d 1178 (9th Cir. 1988).

Therefore, to the extent the Unions seek to enjoin the

occurrence of past events, their appeal is dismissed as

moot.

Ill.

The heart of this case is whether the district court had

jurisdiction over the dispute between the parties. Under

the RLA, disputes that arise between a railroad and its

employees are divided into two categories. Disputes aris-

ing from grievances or under the collective bargaining

agreement are subject to compulsory arbitration. RLA

§ 3, 45 U.S.C. § 153. The courts have rather inappropri-

ately labeled these disputes “minor.”’ During arbitration

of a “minor” dispute, the employer may make changes

in working conditions in accordance with his interpreta-

tion of the collective bargaining agreement.

the district court’s memorandum opinion explaining its February

16 order had not vet issued, the Unions’ appeal was interlocutory.

Two events below resolved this argument.

On June 13, 1990, the district court issued an opinion explaining

its February 16 and May 15 orders. The Unions informed the

district court of the dispute on appeal concerning the finality of the

judgment, and on July 3, the district court entered a final judgment

for NS. The Unions noted appeal No. 90-2697 immediately, and NS

consented to the Unions’ motion to consolidate. This court granted

the motion. Thus ended any dispute over the finality of the judy-

ment below.

A “major” dispute, governed by RLA § 6, 45 U.S.C.

§ 156, involves the creation or change of a collective bar-

gaining agreement. These disputes are resolved through

a lengthy process of negotiation, compulsory mediation,

voluntary arbitration, and, if all else fails, strikes and

lockouts. During this process, the employer may not im-

pose a unilateral change in the working condition being

negotiated.

Distinguishing a major from a minor dispute can be

difficult, but the test is deliberately tilted toward finding

a dispute minor:

Where an employer asserts a contractual right to

take the contested action, the ensuing dispute is

minor if the action is arguably justified by the terms

of the parties’ collective bargaining agreement.

Where, in contrast, the employers’ claims are frivo-

lous or obviously insubstantial, the dispute is major.

Consolidated Rail Corp. v. Railway Labor Executives’

Ass’n, 109 S.Ct. 2477, 2482 (1989).

NS asserts just such a contractual right to transfer

lines. NS argues that the furlough and -reduction in

force provisions of its collective bargaining agreement

inescapably imply that it has unimpeded power to sell

lines and lay off workers. In addition, NS presented evi-

dence of a past practice of acquiescence by the unions

in this interpretation.

We agree with the district court’s conclusion that NS’

position is “arguably justified” by the agreement. A

railroad has a “light burden” to establish arbitrability

under the RLA. Consolidated Rail, 109 S.Ct. at 2482.

A district court need not, indeed should not, assess the

relative merits of the parties’ competing interpretations

of. the contract in order to find the dispute “minor.” If

the railroad’s assertion that the collective bargaining

agreement controls the dispute rises above the “frivolous

or obviously insubstantial,” then the court must dismiss

the action for lack of subject matter jurisdiction. Kushto

v. Brotherhood of Railway, Airline and Steamship Clerks,

818 F.2d 290, 293 (4th Cir. 1987) (district court may

not address merits of minor dispute, but must instead

dismiss for lack of jurisdiction).* In this case, the dis-

trict court found:

In none of [the collective bargaining agreements] is

there any restriction on the right of the carrier to

sell, lease, abandon, or grant trackage rights over its

rail lines. Nor do the agreements obligate [NS]

to require that a purchaser or lessee of a rail line

assume the parties’ existing collective bargaining

agreements, or hire the carriers’ employees. Rather,

recognizing that a carrier’s discontinuance of opera-

tions may cause jobs and work assignments to be

eliminated or reduced and employees to be reassigned

to different positions, the agreements include provi-

sions, in various forms, explicitly reserving to |NS]

the flexibility to abolish jobs, and furlough employees

as a result of a sale, lease, abandonment, or other

disposition of a rail line.

Railway Labor Executives’ Ass’n v. Chesapeake Western

Ry., No. CA-89-1157-A, slip op. at 13 (E.D. Va., June 13,

1990).

This reasoning certainly presents an “arguably justi-

fied interpretation of the existing agreements; accord-

ingly, the dispute is minor.’

% The district court does have the limited jurisdiction to enjoin

strikes over minor disputes. Consolidated Rail, 109 S.Ct. at 2481,

citing Trainmen v. Chicago R. & I.R. Co., 353 U.S. 80 (1957).

‘

4 Inasmuch as NS’ position is “arguably justified” by the existing

agreement, we need not address the more difficult question whether

a railroad’s status quo obligation during resolution of a major dis-

pute prohibits it from divesting itself of lines. The Supreme Court

has answered this question no as regards sales of an entire railroad.

Pittsburgh & Lake Erie Ry. Co. v. Ry. Labor Evecutives’ Ass’n,

109 S.Ct. 2584, 2596 (1989) (“| T |he decision of a railroad employer

to go out of business and consequently reduce to zero the number

of available jobs is not a change in the conditions of employment

forbidden by the status quo provision of § 156.”). The Seventh and

. Ya

IV.

Unlike most minor disputes, the subject matter of this

case is actually the subject of current collective bargain-

ing by the parties. The Unions attempt to complicate the

major’minor dispute analysis with references to this

bargaining. We are unpersuaded by their argument.

Soon after April 1, 1988,° the Unions filed notices,

pursuant to $6 of the RLA (45 U.S.C. § 156), that they

sought bargaining for new agreements concerning job

security in the event of rail line transfers. The nego-

tiations have proven fruitless, even with the RLA-

prescribed assistance of the National Mediation Board.

President Bush has recently created a Presidential Emer-

gency Board, pursuant to RLA $10 (45 U.S.C. § 160),

to further mediate the dispute. Executive Order No.

12,714, 55 Fed. Reg. 19047 (1990).

‘he Unions rely primarily on these $6 notices and the

ensuing two years of negotiation to show that the dispute

is “major.” To be sure, that dispute over prospective

contract rights is major. Accordingly, the railroad must

maintain the status quo during those negotiations, and

may not unilaterally impose an amendment to the collec-

tive bargaining agreement. The Achilles’ heel of the

Unions’ argument is that the railroad’s actions are “argu-

ably justified” by the evisting agreement. The service of

a $6 notice and the beginning of bargaining over the

proposed changes does not convert a minor dispute into

a major one. General Committee of Adjustment v. CSX

R.R. Corp., 893 F.2d 584, 594 (3d Cir. 1990); CSX

Eighth Cirenits have extended this rule to line sales like the ones

involved here. Chicago & North Western Transp. Co. v. Railway

Lohor Ewecutives’ Ass’n, Nos. 89-3265(L), slip op. at 12-13 (7th

Cir., July 17, 1990); Railway Labor Evecutives’ Ass'n-v. Chicago

& North Western Transp. Co., 890 F.2d 1024 (8th Cir. 1989),

cert, denied, 110 S.Ct. 3237 (1990).

> April 1, 1988, was the expiration date of the moratorium on

RLA $6 bargaining notices, as set by cone 1984 National Agree-

ment to which nearly all railroads and unions were parties.

10a

Transp., Inc. v. United Transp. Union, 879 F.2d 990

(2d Cir. 1989), cert. denied, 110 S.Ct. 720 (1990).

Therefore, the railroad’s sales do not alter the status quo

in violation of the RLA.

Finally, the Unions argue that, notwithstanding that

the dispute is minor and must be resolved through arbi-

tration, the district court erred by not issuing an injunc-

tion to preserve the status quo. The Unions’ logic is that,

if they win the arbitration, they cannot get whole relief

unless the status quo has been preserved in the interim.

To the extent this issue involves the W&LE or other

past transfers, it is moot for the reasons we have stated

above. In zeny event, the unions’ assertions are meritless,

and are rejected by all recent authority on point.° The

very fact of arbitration presupposes that the railroad’s

interpretation wil! not always prevail; nonetheless, the

RLA permits a railroad to proceed to operate under its

interpretation of the agreement during the arbitration.’

6 See, e.g., General Committee, 893 F.2d at 593; CSX Transpor-

tation, 879 F.2d at 1004-05; International Ass’n of Machinists v.

Eastern Air Lines, 826 F.2d 1141, 1145-51 (1st Cir. 1987). Com-

pare Brotherhood of Locomotive Engineers v. Missouri-Kansas-

Texas R.R., 363 U.S. 528 (1960) (district court may condition

granting of strike injunction on railroad’s maintaining status quo

during arbitration).

7 Because of our disposition of this case based on the district

court’s lack of jurisdiction over minor disputes, we decline to

address the merit of its alternative holding that the employee pro-

tective measures the ICC must impose on § 11343 transactions are

exclusive and displace the RLA. As the Supreme Court recently

admonished:

we “are not at liberty to pick and choose among congressional

enactments, and when two statutes are capable of co-existence,

it is the duty of the courts, absent a clearly expressed con-

gressional intention to the contrary, to regard each as effective.”

* * * *

It is urged that the [Interstate Commerce Act] provides a

comprehensive scheme for resolution of labor protection issues

lla

This appeal is dismissed to the extent it is moot. In

all other respects, the judgment below is affirmed.

AFFIRMED IN PART AND

DISMISSED IN PART

arising out of [CC-regulated transactions and that rail labor

must take advantage of those procedures rather than strike.

We are unpersuaded that this is the case. . . . [N]o applicable

provision has been called to our attention that imposes any duty

on rail unions to participate in ICC proceedings and to seek

ICC protections with which they must be satisfied. ... We find

nothing in the ICA that relieved [the railroad} of [its duty to

bargain], nor anything in that Act that empowers the ICC to

intrude into the relationship between the selling carrier and

its railroad unions.

Pittsburgh & Lake Erie Railway Co., 109 S.Ct. at 2596, 2598 (1989)

(citations omitted).

12a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Alexandria Division

Civil No. 89-1157A

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, et al.,

Plaintiffs,

CHESAPEAKE WESTERN RAILWAY, et a/.,

Defendants.

ORDER

This matter comes before the Court on the parties’

cross motions to Dismiss and for Summary Judgment.

Moreover, defendants seek relief on their counterclaims

for declaratory and injunctive relief.

Defendants advance various grounds in support of their

motion. First, defendants assert that the Court does not

have subject matter jurisdiction over this dispute as it is

“minor” and therefore subject to mandatory arbitration,

pursuant to 45 U.S.C. § 153. Second, defendants contend

that plaintiffs’ Section 6 notices created no “status quo”

obligation, pursuant to the Railway Labor Act (“RLA’),

barring defendants’ from implementing the various leases

and other trackage transactions in issue. Third, defend-

ants argue that the railroad transactions authorized and

conducted pursuant to 49 U.S.C. $ 11343 are within the

exclusive jurisdiction of the Interstate Commerce Com-

mission (“TCC”) and are not properly before this Court.

Fourth, defendants claim that certain of plaintiffs’ claims

were filed outside the applicable statute of limitations

and are accordingly barred. And, fifth, defendants allege

that two of the plaintiffs, Brotherhood of Locomotive

Engineers and United Transportation Union, have waived

any claims they may have had regarding the “VIP

Trackage Rights” transaction.

l3a

For the reasons stated from the bench, and in a forth-

coming memorandum opinion, defendants’ Motion for

Summary Judgment is GRANTED with respect to the

first ground. The Court concludes that the dispute is

“minor” and therefore subject to mandatory arbitration

under 45 U.S.C. § 153. Accordingly, this Court does not

have subject matter jurisdiction. See Rule 12(b) (1),

Fed. R. Civ. P.

The Court also concludes that the Interstate Commerce

Commission has exclusive jurisdiction over those trans-

actions authorized and conducted pursuant to 49 U.S.C.

§ 11843. Thus, the Court finds an independent, alterna-

tive basis for not exercising its jurisdiction over those

transactions.

In light of the Court’s holding that it lacks jurisdiction

over this matter the Court does not reach the other issues

defendants raise concerning the complaint.

With respect to defendants’ request for declaratory

relief in the form of a strike injunction, the matter is

TAKEN UNDER ADVISEMENT. Defendants are di-

rected to file a brief, not later than 5:00 pm on Friday,

March 2, 1990 addressing, inter alia, (i) the legal and

factual bases on which they rely in contending that the

Court should resolve the strike injunction matter at this

time; (ii) the merits of the request for a strike injunc-

tion; and (iii) a full description of the means and meth-

ods available to plaintiffs under the law to compel defend-

ants to bargain over the issue of successor agreement

provisions. Plaintiffs’ response is due not later than

5:00 pm on Monday, March 12, 1990. Oral argument on

these issues will be heard at 2:00 pm on Friday, March

16, 1990.

l4a

The Clerk is directed to issue copies of this Order to

all counsel of record.

/s/ T.S. Ellis, ITI

T. S. Eis, III

United States District Judge

Alexandria, Virginia

February 16, 1990

15a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Alexandria Division

TRANSCRIPT OF PROCEEDINGS

Civil Action No. 89-1157-A

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, et al.,

Plaintiffs-Counterclaim Defendants,

vs.

CHESAPEAKE WESTERN RAILWAY, et al.,

Defendants-Counterclaim Plaintiffs.

2:00 p.m.

February 16, 1990

CROSS-MOTIONS FOR SUMMARY JUDGMENT

AND/OR DISMISSAL

BEFORE:

THE HONORABLE T. S. ELLIS, ITI,

Presiding United States District Court Judge

APPEARANCES:

For the Plaintiffs:

John O’B. Clarke, Jr., Esq.

David J. Strom, Esq.

For the Defendants:

Jeffrey S. Berlin, Esq.

Mark FE. Martin, Esq.

William P. Stallsmith, Jr., Esq.

* . * *

l6a

[101] THE COURT: All right. To begin with, let me

say that it is a pleasure to be presented with a number

of challenging issues in a thorough and_ professional

fashion as has occuurred today. The briefs were very

good and the presentations were very good.

There’s a reason why appellate courts only hear at

most an hour of argument. There’s just so much you can

accomplish, or at least I always thought, through oral

argument, although I have attended oral arguments in

England that went on for six weeks but they had no

written briefs and they read the cases together at the

bench often and it was a strikingly different way to do

things. And not having quite the oral tradition that they

do, I can see advantages to our process.

But in any event, the briefs were very good and the

oral presentations were also very good. And that’s a

pleasure. I hear a great many cases in this division.

[102] Things move fairly briskly in this Court and we

hear a lot of cases. And the range of presentations varies

from the abysmal, more often than I would like to con-

cede, to the excellent, and vou all fall into the latter

category. And I take occasion to say that because it is

such a pleasure.

Now, inevitably, however, one of you will be happy

and one of you will be unhappy. And the person, the

one who is unhappy will inevitably go away thinking that

the Court has not fully understood the problem. Indeed,

you both may emerge. And I wouldn’t be surprised, be-

cause it is not a simple problem. It has a surface sim-

plicitly to it. There’s a certain, there’s a certain decep-

tive simplicity to it. It is in fact more complicated than

that.

And indeed, I think that the excursion through the

footnotes certainly underscored that because there is—

what’s going on here really is a decades-long struggle,

as it were, over the interpretation of certain acts. And

it is really a struggle over some fundamental—it’s a

fundamental struggle rather than a simple one.

17a

All right. The defendant’s motion to dismiss and for

summary judgment is before the Court as is the plain-

tiff’s cross-motion. Defendant asserts five grounds, both

with respect to challenges to the Court’s subject matter

jurisdiction under 12(b) (1) and for summary judgment

1103] on other issues.

I address first, cf course, as I must, the subject matter

jurisdiction issue which is fundamental to the Court’s

power to act.

Defendants argue that the dispute is a minor one and

therefore subject to mandatory arbitration under Section

153. And we know from the Conrail case and others that

whether a dispute is major or minor doesn’t depend on

the significance of the dispute. Minor disputes are those

that may be conclusively resolved by interpreting existing

agreements, and major disputes are disputes that seek to

create new rights or duties outside the context of the

collective bargaining agreement in its express or implied

terms.

Minor disputes that cannot be resolved by normal in-

house procedures must be referred for arbitration under

the Section 153 First (1) to the NLRB [ste], the National

Railway Labor Board. And arbitration, as we know from

the statute and the cases, in this connection is compulsory

and the jurisdiction of the board is primary and exclusive

thereby depriving federal courts of subject matter juris-

diction.

The test to establish or to apply in determining whether

a dispute is major or minor is set forth in the Conrail

case. And it is, where an employer asserts a contractual

right to take the contested action, the ensuing [104] dis-

pute is minor if the action is arguably justified by the

terms of the parties’ collective bargaining agreement.

Where in contrast the emplover’s claims are frivolous or

obviously insubstantial, the dispute is major.

Applying this test, the Court has concluded, after sub-

stantial reflection and review of the cases, that the dispute

raised is a minor dispute because it is arguably capable

18a

of being conclusively resolved by interpreting the existing

agreements, either expressed or implied.

The current contract provisions do provide various pro-

cedures and rights in the event of employee furlough.

And these furlough provisions purport to apply whatever

the cause for the furlough.

Moreover, there is past practice, undeniable on the rec-

ord, that makes clear that transactions of the sort in issue

here which I reviewed earlier—namely, the sale, lease, and

discontinuance of spur lines—makes clear that transac-

tions of the sort in issue have been dealt with under

these provisions in the past.

The existence of this—that is, the provisions and the

practice under these provisions—means that the disputes

concerning their content must be resolved by reference to

them.

Now, in essence, what this means is that until [105]

the unions and the railroads agree otherwise in the col-

lective bargaining agreement, the functional equivalent

of a successor agreement is what the railroads have been

doing; namely, the application of the existing furlough.

Now, Section 6 notices do not alter this result. I think

the Second Circuit put it well when it says they have no

alchemizing effect—they’re not magic—to change that

result.

I was, however, interested and queried counsel about

what was the effect of the Section 6 notices, whatever the

past practice, whatever the status quo, the railroads—I

mean the unions want to bargain, they want the railroads

to bargain over whether there should be successor provi-

sions.

This is a fundamental—it might be a fundamental dis-

agreement, put in terms of whether the work should follow

the location or whether it should follow—the workers

should belong to the location or whether they go wherever

the work is.

And I was assured by counsel that, in effect, there

hasn’t been a refusal to bargain about this, that bar-

19a

gaining hasn’t yet occurred and currently the National

Mediation Board has the matter under advisement.

Is that correct, Mr. Berlin?

MR. BERLIN: In every respect, Your Honor.

{106] THE COURT: All right.

Now, having reached that conclusion, I’m going to write

a memorandum opinion on this. It may take two weeks or

more for the Court to get to it, but I will get to it as soon

as I can. In the meantime, I will issue an order. The

Court has no jurisdiction over the case and no subject

matter jurisdiction.

Now, the defendants also argue that certain of the

transactions are authorized and conducted pursuant to

11343 or 49 U.S. Code under which the Interstate Com-

merce Commission has issued certain orders imposing con-

ditions, the so-called Mendocino Coast conditions, on those

transactions.

And the Court was concerned about whether the major /

minor analysis would apply to those or whether those had

to be considered under a primary and exclusive jurisdic-

tion argument.

There’s no case really that directly confronts that issue.

The Court therefore alternatively holds that as to those

cases, that’s an independent ground in those cases for the

Court not exercising its jurisdiction over those cases.

And in the face of those conditions, at least the Chicago

& Northwestern case, the Eighth Circuit case of 1963,

indicates that the ICC’s approval of a transaction, [107]

subject to certain employee protective conditions, displaces

the Railway Labor Act process for negotiating over rates

of pay, rules, and working conditions. These disputes al-

ternatively then go to the JCC for resolution under its

scheme.

Now, the Court doesn’t reach the statute of limitations

issues or any of the other issues. It implicitly rules, of

course, that the status quo issue—well, it doesn’t reach

that because it has no subject matter jurisdiction.

, |

20a

The Court notes, however, that the status quo in a

sense is being maintained as to the pay, the wages, and

the working conditions, which is to say that those em-

ployees’ pay, wages, and working conditions are governed,

in the Court’s view, arguably by the collective bargaining

agreement and as that’s going on. The Court doesn’t

reach what would happen in this case if an arbitration

board decides that this isn’t something that they can arbi-

trate over. Nor does it reach what would happen in the

event that there is a strike over the refusal of railroads

to reach agreement or bargain over something of this sort.

All right. That concludes all the remarks that I’m

going to make from the bench. I will issue a written deci-

sion and I will say again that the issue is not the easy

one that I think might appear from the surface reading

[108] of the decisions.

Footnote 17, Mr. Clarke, is indeed a puzzle. As I review

Footnote 17—and it may be that I’ll have cause to review

it yet again if this matter is reversed. I find it difficult

to believe that courts will end up distinguishing between

whether a sale is complete or almost complete or very

nearly complete or not very complete at all, whether every

last thing has been sold.

Footnote 17, maybe, as I think you almost alluded to,

maybe the votes aren’t there to overrule Telegraphers but

certainly the sentiment was there that if there’s a way

not to deal with it at this time, we don’t want to deal

with it.

But it seems clear from everything else in that decision

and from the cases leading up to it, with the exception of

that, that this case is getting out of that business. In

other words, they’re getting out of the, that particular

spur line business by lease, discontinuance, or sale.

I also found the decisions of the Second and Third and

the Seventh Circuits to be more persuasive than the

Eighth Circuit decision. The Eighth Circuit decision, if

the record was as complete there as it was in all of the

others, then it’s irreconcilable, and that is yet another

issue for the Supreme Court to decide.

21a

[109] If it is not, of course, then it’s reconcilable by

virtue of the fact that a decision was made on a factual

record that was less complete than the others and perhaps

improvidently made on that record and perhaps should

have been returned for further record.

All right. Mr. Clarke, Mr. Berlin, is there anything

further that the Court needs to accompiish today in this

matter?

MR. CLARKE: Your Honor, we have—I realize that

the trial is now off.

THE COURT: That’s right.

MR. CLARKE: The one thing I’m curious about on

the Court’s ruling is there was also a request for a strike

injunction, and is the Court ruling on that as well? Be-

cause I might add that in the Wheeling transaction that

is now scheduled for—

THE COURT: Is that withdrawn, Mr. Berlin?

MR. BERLIN: Is the request withdrawn?

THE COURT: Yes.

MR. BERLIN: No, Your Honor. We would think the

Court should rule on the Count I of the counterclaim con-

sistently with your dismissal of the case.

THE COURT: There is no strike impending, is there?

MR. BERLIN: Your Honor, one was announced to us

[110] as impending but, if I may, there’s a request for

declaratory relief in Count I. And that, we submit, the

Court can and should rule on consistently with the dis-

missal of the complaint.

The declaratory judgment, Your Honor, would ma-

terially assist the parties in determining what their obli-

gations are in the event a strike does impend if when

this transaction comes about, something like that happens.

THE COURT: But who is to say the world won’t look

very different at that time in terms of anything that the

National Mediation Board might do, anything that the

railroad might consider prudent to do, anything that the

unions might consider prudent to do? Why should this

Court undertake now—when is this next sale?

a —————— —

22a

MR. BERLIN: It’s not going to happen within the

next few weeks. I don’t think we have a date on it yet.

MR. CLARKE: Well, there is a date. There were war

[sic] notices, w-a-r—

MR. BERLIN: We won’t make those dates.

MR. CLARKE: —that were put out to be March 14

or within a 14-day period beginning March 14.

MR. BERLIN: I’m authorized to say that the transac-

tion is not going to occur before April. It may be later

than that. There are numerous things to do before doing

a transaction this large.

1111] Your Honor, the declaratory judgment is not dif-

ferent from the dismissal and stands on exactly the same

foundation and requires no additional facts, and would

decide for these parties what their rights are as regards

to the—

THE COURT: But why isn’t that contradictory to a

finding of a lack of subject matter jurisdiction once I

reach that point? Why should you have your cake and

eat it too? If the Court has no jurisdiction because there

are minor disputes, then why is there anything left?

MR. BERLIN: In both the Second and Third Circuit

cases, Your Honor, relief was sought by counterclaim and

obtained by the railroad along with a dismissal for lack

of subject matter jurisdiction. We do have a controversy,

the unions and the railroads, over whether their dispute

over these transactions—

THE COURT: Well, what your answer should be then

is, yes, the Court has no subject matter jurisdiction over

that aspect of the plaintiff’s claim, but the counterclaim

has en independent jurisdictional basis. Is that what

your’re saying?

MR. BERLIN: That’s right, Your Honor. The Rail-

way Labor Act and the Declaratory Judgment Act com-

plete that. And the facts are all the same. So that in

deciding the one-——

[112] The COURT: Well, I’m not persuaded that—

and I’m certainly not going to rule on it this afternoon.

23a

And I’m not persuaded that I need to rule on it in the

foreseeable future. I’m more inclined to—indeed, I will

not rule on it, as I said, today. It seems—let me have a

copy of the—let me have the complaint back again, please.

All right. Well, I have the complaint. I’m not sure I

have the amended—yes, December 12 is the amended.

You didn’t denominate it amended, did you?

MR. STROM: I believe it’s denominated on the sig-

nature sheet, Your Honor.

THE COURT: Yes. But the title is Complaint for

Declaratory Judgment. Now where is the counterclaim?

Do you have a copy of the counterclaim?

MR. BERLIN: Yes, Your Honor.

THE COURT: All right. Hand that to the marshal,

please.

All right. At page 20, paragraph 29, you say that

you’re entitled to a judgment declaring that it’s minor.

That’s what it says under one. And under two, that’s all

paragraph 29(1) says, isn’t it, Mr. Berlin?

MR. BERLIN: Your Honor, you’re quoting from my

copy.

THE COURT: All right. And the second—well, [113]

it says that they’re entitled to, defendants are entitled to

a judgment declaring that the question whether they may

engage in the sale, lease, or other disposition of the lines

without first bargaining is a matter of interpretation or

application of agreements subject to mandatory arbitra-

tion.

And then, second, an order enjoining the labor unions

and the RLEA from attempting by strike, work stoppage,

or otherwise to force the defendants to complete the proc-

ess of bargaining in connection with the Section 6 notices

served by the labor unions prior to selling, leasing, or dis-

posing of lines ef railroad.

The first aspect of that is covered by the Court’s ruling

where I’ve said it’s a minor dispute.

Now, why is there an independent basis of jurisdiction,

and then why is it so imminent that the Court should

rule on it?

24a

MR. BERLIN: Well, taking first the question of the

declaratory relief which is, indeed, the mirror image of

the dismissal for lack of jurisdiction, it is the same sub-

ject matter as covered by the dismissal but it amounts to

a judgment on the nature of the dispute as opposed to a

declination of jurisdiction. And we submit that Your

Honor can do that.

THE COURT: Let me ask you—come to the podium,

(114) Mr. Berlin. As you know, I was interested in the

issue of how can the union get the railroads to talk about

this change. They want a change in the situation. They

want, instead of these furlough provisions applying, they

want a successor provision that says that the work, if you

sell, lease, or discontinue—not discontinue presumably—

but if you sell or lease, somebody else does the work, that

before you can let anyone else do the work, you’ve got to

rehire these same folks under the same collective bargain-

ing agreements.

How do they get the railroads to talk about that with

them?

MR. BERLIN: Well, they serve Section 6 notices as

they have.

THE COURT: All right. Now what happens next?

MR. BERLIN: Not everything in every Section 6

notice, Your Honor, is a proper subject of mandatory

bargaining.

THE COURT: All right. So you sit down to bargain

and the union says, we want to talk about this. The rail-

road says, we don’t want to talk about it.

MR. BERLIN: That sometimes happens.

THE COURT: All right. Now, if that happens, am I

correct that one remedy the union has under those cir-

cumstances is to say, you don’t want to talk about that,

[115] fine, we strike.

MR. BERLIN: Not quite, Your Honor. The process

for resolving the then major dispute triggered by the

service of the notice requires going to the National Media-

tion Board if either party so requests or the board takes

jurisdiction of it.

25a

THE COURT: Isthat where it is now?

MR. BERLIN: Yes, Your Honor, along with other

notices served as long ago as 1984. There is a package of

ongoing disputes over bargaining proposals from both

sides currently in the hands of the mediation board and

positions have not been taken—

THE COURT: Now, is there some basis once a Section

6 notice is filed and the matter is referred to the National

Mediation Board, is there some provision of the law that

precludes strikes on that issue until the National Media-

tion Board is concluded?

MR. BERLIN: Yes.

THE COURT: Of course there is. And what section

is that? :

Mr. BERLIN: Well, Section 6 and Section 10 operate

during the pendency of mediation proceedings and there-

after—Section 5, sorry. Section 5 applies to the media-

tion board proceedings.

THE COURT: Well, I’ll tell you what I’m going to

[116] do, Mr. Berlin. I think you have a clear view

of the Court’s concern, which is to say that there ought

to be a mechanism in the law where these unions can

get to talk to the railroads about changing the world

the way they want to change it. It’s a pretty funda-

mental change. And they want to talk about that. And

it seems to the Court that if the railroad doesn’t want to

talk to it, one of the remedies that they have absent

mediation is strike.

At the risk of imperiling several other forests, I’m

going to require the parties to file additional briefs on

this issue; that is, on the issue of paragraph 29, I think

it’s 29(2). I'll hand it back to you.

MR. BERLIN: 29(1) is the declaration, 29(2) the

strike injunction.

THE COURT: Yes. Well, the declaration, however,

is nothing more than what the Court is giving when the

26a

Court grants the motion to dismiss under 12(b) (1); that

is, perforce the declaration that it is a minor dispute

and must go to mandatory arbitration. So that’s not

what you’re asking for. What you’re asking for is two,

29(2).

And on that, I’ going to require additional briefs—

you might try to be no less thorough but perhaps a little

more succinct—on the issue of why the Court should

resolve that now, why is it so immediate. and indeed,

why is there a right to that now. Because I have [117]

in mind absent, as you pointed out, I have, absent a

National Mediation Board type bar to a strike while

they’re considering, I have in mind that, fairly simple-

mindedly that the general overall scheme is that if the.

union wants something and they can’t get it, one of

their remedies is strike. And if there are impediments

to that, then this gives you an opportunity to call them

to my attention.

So you'll file your brief two weeks from today, by the

close of business two weeks from today. And the response

—let’s see, that would make it March 2. And the re-

sponse would be due—how long will it take the response?

MR. CLARKE: Your Honor, we would get it in

within one week.

THE COURT: All right. Then the response—I’ll

tell you what. I will give you until the 12th, the close

of business the 12th. That was always awful for me to

hear on the other side of the bar because it destroyed a

weekend.

But in any event, that will allow me to hear oral

argument on the 16th at 2 p.m., the 16th of March at

2 p.m. And I set those dates because I think those are

well in advance of any transaction that may occur or

any need for any injunction. I think you have, I think

you have the Court’s concerns about it.

[118] MR. BERLIN: Yes. Thank you, Your Honor.

THE COURT: All right. Anything further in this

matter today?

27a

MR. BERLIN: No, Your Honor.

MR. CLARKE: No, Your Honor.

THE COURT: All right. I thank counsel again for

their cooperation in this case. Court stands adjourned

until 9 o’clock Tuesday morning.

[The above matter was concluded at 6 p.m.]

28a

APPENDIX D

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINA

Alexandria Division

Civil Action No. 90-1157-A

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, et al.,

Plaintiffs,

Vv.

CHESAPEAKE WESTERN RAILWAY, et al.,

Defendants.

ORDER

By Order dated February 16, 1990, this Court granted

defendants’ Motion for Summary Judgment on _ the

cround that the dispute presented was “minor” and

therefore subject to mandatory arbitration under 45

U.S.C. § 153. The Court, accordingly, had no subject

matter jurisdiction. An alternative ground, also stated,

was the exclusive jurisdiction of the Interstate Commerce

Commission. The Court then took under advisement de-

fendants’ counterclaim request for declaratory relief in

the form of a strike injunction, ordered further briefing

and scheduled a hearing. Thereafter, by Order dated

Mareh 30, 1990, the Court, following oral argument on

that date, took defendants’ injunction request under ad-

visement and noted that as defendants had represented

that no strike was then imminent, the Court would with-

hold its ruling on defendants’ injunctive relief request

until the issuance of a memorandum opinion. More re-

cently, plaintiffs filed a motion on May 7, 1990 seeking to

enjoin the Wheeling transaction or, in the alternative,

29a

a reconsideration of their earlier motion. Plaintiffs re-

quested a ruling on this motion as soon as possible.

On the basis of the parties’ briefs and oral arguments,

the Court concludes that there is no legal basis for the

issuance of the injunctive relief sought by plaintiffs.

In a related case the Court has denied plaintiffs’ request

for an injunction to stop the Wheeling transaction. Rail-

way Labor Executives’ Ass’n. et ai. v. Wheeling Acquisi-

tion Corp., CA No. 90-0597-A.' Moreover, in February

the Court dismissed plaintiffs’ action for lack of subject

matter jurisdiction after ruling that the dispute pre-

sented was ‘minor’ and therefore subject to mandatory

arbitration under the RLA. In the course of reaching

that decision, the Court rejected arguments, that plain-

tiffs’ various notices triggered any status quo rights

under the RLA. Plaintiffs advance no new persuasive

legal argument, nor have they cited any authority that

would support the injunctive relief they seek. Accord-

ingly, the plaintiff’s request for injunctive relief should

be, and the same hereby is, DENIED.

Defendants’ request for injunctive relief stands on a

different footing. The Court has already ruled that the

RLA commits the resolution of “minor” disputes exclu-

sively to binding arbitration. 45 U.S.C. § 153. In this

connection, it is well settled that strikes over minor dis-

putes violate the RLA and that federal district courts

have jurisdiction to enjoin such strikes. Consolidated

Rail Corp. v. RLEA, 109 S. Ct. 2477, 2481 (1989)

(“{c]ourts may enjoin strikes arising out of minor dis-

putes”); Brotherhood of Railroad Trainmen v. Chicago

River & Indiana R.R., 353 U.S. 30, 42 (1957); Norfolk

& Portsmouth Belt Line RR. v. Brotherhood of Railroad

Trainmen, 248 F.2d 34, 40, 43, 46 (4th Cir. 1957), cert.

denied, 355 U.S. 914 (1958). Because injunctions in

this context serve to preserve and ensure RLA § 3 com-

'A Memorandum Opinion will issue today in that case.

30a

pliance, the provisions of the Norris-LaGuardia Act, 29

U.S.C. $$ 101-15, do not block the issuance of such relief.

Brotherhood of Lecomotive Engi’s v. Louisville & Nash-

ville R.R., 373 U.S. 32, 41-42 (1968! ; Chicago River, 353

U.S. at 39-42. Thus courts on a number of oceasions have

enjoined strikes over minor disputes. Flight Engineers

Int’?l Ass’n v. American Airlines, Inc., 303 F.2d 5, 13

‘5th Cir. 1962); see Norfelk & Portsmouth Belt Line

R.R. v. Brotherhood of Railroad Trainmen, 248 F.2d at

40, 46 (strikes over minor disputes “are neither contem-

plated nor permissible;” where dispute was minor, “re-

sort by the Brotherhoods to a strike was not lawful and

a permanent injunction should be entered’); General

Committee of Adjustment, UTU v. CSX R.R., No. 89-

5246, slip op. at 23-24 (3d Cir. Jan. 5, 1990); CSX

Transport., Ine. v. United Transport. Union, 879 F.2d

990, 1004 (2d Cir. 1989) (permanent injunction), cert.

denied, 110 S. Ct. 720 (1990); Chicago & North Western

Transport. Co. v. RLEA, 855 F.2d 1277, 1288 (7th Cir.)

(preliminary injunction), cert. denied, 109 S. Ct. 493

(1988); see also Main Central R.R. v. United Transport.

Union, 787 F.2d 780, 784 (1st Cir.) (concluding that

controversy over lease of rail line presented a minor dis-

pute and remanding with instructions to enter an order

enjoining unions from striking), cert. denied, 479 U.S.

848 (1986); Atchison, Topeka & Santa Fe Ry. v. RLEA,

Nos. 90-1383, 90-1438 (7th Cir. February 20 and 27,

1990).

Although the power of courts to enjoin strikes over

“minor” disputes is clear, such injunctions should not

issue absent a showing that such a strike is imminent

or likely. Plaintiffs, at the last hearing, indicated that

no such strike was planned or imminent. Accordingly,

the Court declines at this time to issue the relief Ge-

fendants request. Defendant’s request for injunctive re-

lief, therefore, should be and the same hereby is, DE-

3la

NIED. Should circumstances change, however, defend-

ants may again seek the relief requested.”

The Clerk is directed to issue copies of this Order to

all counsel of record.

/s’ T.S. Ellis, III

T. S. Evuis, III

United States District Judge

Alexandria, Virginia

May 15, 1990

* The Court notes that defendants have filed a new request for

relief, which the Court has set for hearing at 9:00 a.m., Thursday,

May i7, 1990. As defendants recognize, any injunctive relief issued

in response to defendants’ request must be framed to ensure that

it does not infringe on any rights plaintiffs may acquire in the

future in connection with the issues now in mediation under the

auspices of the National Mediation Board.

32a

APPENDIX E

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Alexandria Division

Civil Action No. 89-1157-A

RAILWAY LABOR EXECUTIVES’ ASSOCIATION, et al.,

Plaintiffs,

CHESAPEAKE WESTERN RAILWAY, ef al.,

Defendants.

MEMORANDUM OPINION

Introduction

This Railway Labor Act (“RLA”) dispute, brought by

fourteen labor unions and the Railway Labor Executives’

Association (“RLEA”) against a group of railroads,

grows out of the railroads’ sale, lease, and abandonment

of various of the railroads’ spur lines. Plaintiffs contend

that defendants violated their duties under the RLA (i)

to exert every reasonable effort to settle all disputes,

maintain agreements and bargain only with designated

employee representatives; (ii) to give written notice to

bargain with its employees’ representatives regarding de-

fendants’ decision to enter into intra-corporate leases and

trackage rights agreeements; and (iii) to comply fuily

with RLA bargaining and status quo obligations triggered

by Section 6 notices when defendants discontinued opera-

tions and implemented lease transactions and trackage

rights agreements. The defendant railroads deny plain-

tiffs’ contentions and contend instead that the Court lacks

33a

subject matter jurisdiction because the parties’ dispute is

arguably over the interpretation and application of exist-

ing labor agreements and the RLA requires that such so-

called “minor disputes” be resolved exclusively by arbi-

tration. Defendant railroads further counterclaim for a

permanent strike injunction to prevent the unions and

RLEA from “attempting, by strike, work stoppage, or

otherwise, to force [the railroads] ' to complete the

process of bargaining” with the unions in connection with

the Section 6 notices served by the unions prior to “selling,

leasing, or otherwise disposing of” railroad lines.

The parties filed cross-motions for summary judgment

and, as there were no disputed issues of material fact, the

Court, on February 16, 1990, ruled that it lacked subject

matter jurisdiction because plaintiffs’ complaint indeed

presented a “minor dispute” under the RLA. Accordingly,

the Court dismissed the labor plaintiff’s claim and left the

parties to their RLA arbitration remedy. Arbitration

proceedings are currently ongoing.* As an alternative

basis for summary judgment, the Court also concluded

that the Interstate Commerce Commission (“ICC”) has

exclusive jurisdiction over transactions authorized and

conducted pursuant to 49 U.S.C. § 11343. Finally, the

Court held in abeyance defendants’ request for an injunc-

tion to prevent plaintiffs from engaging in self-help or

striking over the minor dispute. An appropriate order

issued reflecting these rulings.* The Court gave the par-

ties leave to file further briefs regarding the propriety of

the Court’s granting injunctive relief. Both parties filed

briefs and the Court heard oral argument. As defendants

' Norfolk Southern Co., Norfolk & Western Railway Co., and

Southern Railway Co.

- Not until May 2, 1990 did plaintiffs initiate the arbitration

process by seeking a special Board of Adjustment under § 3, Second

of the RLA. Defendants there claim that plaintiffs’ submitted issues

are not arbitrable. The matter is now before the NMB.

% See Order dated February 20, 1990.

34a

represented that no strike was then imminent, the Court,

by Order dated May 15, 1990, declined to grant injunctive

relief. This Memorandum Opinion records the Court’s rea-

sons for its February 16 and May 15 decisions.*

Background

Plaintiffs consist of the RLEA, an unincorporated as-

sociation of the chief executive officers of seventeen na-

tional and international railway labor unions of the

United States, and fourteen individual rail labor unions

that represent defendants’ employees for the purposes of

collective bargaining. These entities are collectively re-

ferred to as the “labor plaintiffs.”

4 Rapidly developing events have largely overtaken this Memo-

randum. After the Court’s February 16th dismissal of the com-

plaint for lack of subject matter jurisdiction, the labor plaintiffs

filed an action against the Wheeling Acquisition Corporation

(“Wheeling”), the purchaser of certain Norfolk & Western Railway

Company lines in an effort to block the lines’ sale and compel

Wheeling to bargain with the labor plaintiffs over the hiring and

assignment of the new Wheeling employees. After permitting the

intervention of Norfolk & Western Railway Co., the Court denied

the labor plaintiffs’ TRO request to block the lines’ sale to Wheeling

and dismissed Count I of the labor plaintiffs’ complaint against

Wheeling on the ground that Wheeling was not then a “carrier”

under RLA and hence not required to bargain with the labor

plaintiffs concerning the hiring, assignment, rates of pay and

seniority of its new employees. See RLEA, et al. v. Wheeling

Acquisition Corp., F. Supp. (E.D.Va. 1990). The inter-

venor in the Wheeling case filed a counterclaim and sought a TRO

to prevent the labor plaintiffs from engaging in self help strike

action designed to shut down the operations of Wheeling and the

Norfolk & Western Railway Co. at three important interchange

points. After hearing testimony and oral argument, the Court

granted the TRO on May 17, 1990. Next, on May 23, 1990, after

hearing additional testimony and oral argument, the Court issued

a preliminary injunction enjoining the labor plaintiffs from en-

gaging in strike activity to shut down the operations of Wheeling

and Norfolk & Western operations.

. 35a

Defendants are transportation holding companies and

common carriers by rail* that operate rail lines in the

Mid and South Atlantie region of the United States and

within this Court’s jurisdiction. Norfolk Southern Cor-

poration (“NS”) is the holding company that controls

Norfolk and Western Railway Company (“NW”) and

Southern Railway Company (“Southern”). NS operates

these railroads as a coordinated system often referred to

as the ‘‘NS system.” Chesapeake Western Railway Com-

pany (“CW”), a subsidiary of NW, is also part of the

system.

This dispute was spawned by a series of sales and

leases of certaia NS track lines. While the details of

these transacti.as are not material to the disposition of

the case, a brief summary is included as explanatory

background.

1. The “Thoroughbred Short Line” Program

NS has determined that some lines within its railroad

system have so little traffic originating and terminating

on them that they are unprofitable to operate. Other NS

lines are marginally profitable today, but would require

substantial capital investment for continued operation.

NS has therefore determined that it must dispose of these

two categories of lines by way of sale, lease or abandon-

ment. If the lines are not disposed of to an entity who

will continue their rail service, shippers and others served

by the lines may !ose their access to rail service.

By October, 1987 NS had identified approximately 2700

miles of unprofitable or marginally unprofitable lines.

NS further determined that 1500 miles of this total had

no potential for profitable operation by anyone and had to

be abandoned. The remaining 1200 miles were judged to

5 Defendant railroads are “carriers” under the RLA, 45 U.S.C.

$$ 151 et seq., and the Interstate Commerce Act (“ICA”), 49

U.S.C. § 10102(4).

36a

have the potential for profitable operation by “short line”

operators. NS therefore decided to lease these lines, typi-

cally for 20 year periods, on terms requiring relatively

low initial investments by the short line operators and

providing incentives for the operators to maintain the flow

of traffic connecting with the NS system. Specifically, the

leases are designed to establish a rental obligation that

produces a reasonable return based on the line’s liquida-

tion value, but also to provide for a credit against rental

payments for every rail car interchanged with NS. This

credit is calculated so that if the new operator produces

traffic equal to the traffic on the line in recent years, the

operator pays no rent at all. This leasing program, en-

titled the “Thoroughbred Short Line” (‘““TSL”’) program,

was approved by NS management in early 1988, and im-

plemented immediately.

The first TSL lease, consummated in November, 1988,

involved 72 miles of line in Virginia. Since the initial

lease, NS and its subsidiaries have completed 14 such

leases, involving an aggregate of approximately 810 miles

of line.* Additional TSL leases are planned. Generally,

the TSL leases have been carried out pursuant to ICC

authorization. A provision of the Interstate Commerce

Act (“ICA”), 49 U.S.C. § 11348, governs, inter alia,

transfers of rail lines from one carrier to another. Ordi-

narily, transactions subject to § 11343 may be carried out

® One such lease is the “CCR” lease. That transaction arose on

January 30, 1989, when the Carolina Coastal Railway, Ine.

(“CCR”) filed a Verified Notice of Exemption, pursuant to 49

C.F.R. § 1150.31-34, stating that it would acquire from Southern,

by lease or purchase, a 17-mile section of rail line between Pine-

town and Belhaven, North Carolina. At that time, Southern em-

ployees performed all work on the Pinetown to Belhaven line under

collective bargaining agreements negotiated between their desig-

nated representatives and Southern. On February 6, 1989, pur-

suant to ICC regulations, the transaction was exempted from ICC

review and approval and CCR assumed operations on the line pur-

suant to a lease with Southern. CCR employees have performed

all work on the line since CCR assumed the line’s operations.

37a

only after the participants receive prior ICC approval.

Under 49 U.S.C. § 10505, however, the ICC exempts cer-

tain transactions from the prior approval requirement of

$ 11343. Exemptions were sought and obtained for all

TSL leases subject to § 11343. In all such cases, 49 U.S.C.

$ 10595(g) requires that the ICC impose extensive “em-

ployee protective conditions,” required by 49 U.S.C.

$ 11347 on these transactions. These conditions, often

called the “JM/endocino Coast” * conditions, provide an ar- -

ray of compensatory benefits for employees adversely

affected by a line sale or transfer transaction. In two of

the lease transactions, including the CCR lease, the lessees

were companies that were not already classified as “‘car-

riers” under the ICA. These transactions with ‘‘non-car-

riers” were not subject to § 11343 but, instead, were gov-

erned by 49 U.S.C. § 10901. The ICC generally does not

impose employee protective conditions on transactions

authorized under £ 10901 and did not do so in this case.

2. Other Sales and Leases to Unaffiliated Parties

The largest line disposition planned by NS was “Ohio/

P&WV” transaction. This transaction involved NW’s sale

of approximately 440 miles of line owned in Ohio and the

sublease of approximately 121 miles of line in Ohio, West

Virginia, and Pennsylvania now leased by NW from the

Pittsburgh and West Virginia Railroad (“P&WV”), a

company not affiliated with NS. The purchaser/sublessee

in the transaction, Wheeling Acquisition Corporation

(“Wheeling”) is also not affiliated with NS. Wheeling

was a “non-carrier” under the ICA and, as such, was

initially subject to ICC authorization under § 10901. On

January 12, 1990, Wheeling filed the statutorily required

“Notice of Exemption” with the ICC. The labor plaintiffs

sought unsuccessfully to block this transaction. See supra

7 See Mendocino Coast Ry—Lease & Operate—California West-

err, R.R., 354 L.C.C. 732 (1978), modified, 360 I.C.C. 653 (1980),

aff'd sub nom., RLEA v. United States, 675 F.2d 1248 (D.C. Cir.

1982).

38a

note 4. Wheeling commenced operations as a “carrier” on

May 18, 1990.

3. NS Intra-corporate Transactions

a. The CW lease

On January 24, 1989, Southern and CW gave notice to

the ICC of their intention to engage in an intra-corporate

lease * of Southern’s rail lines between Harrisonburg and

Mount Jackson, Virginia to CW. In addition to that

lease, Southern noted its proposed abandonment of opera-

tions on 5.1 miles of rail line between Mount Jackson and

Edinburg, Virginia. In February, the ICC noted that the

intra-corporate lease was “specifically exempted from

prior [ICC] review and approval” and that on or about

March 15, 1989, Southern and CW would implement the

lease and Southern would discontinue its operations on the

Mount Jackson to Edinburg line. On April 15, 1989,

Southern abolished the train and engine crew positions

staffing the Strasburg to Harrisonburg freight train and

the “mobile agent” and ‘‘agent-cperators” positions head-

quartered at Harrisonburg. Then, two days later, South-

ern transferred operations between Mount Jackson and

Harrisonburg to CW. Since April 17, 1989, CW employees

have performed all work on the leased line. Prior to that

time, Southern employees performed all the work on the

leased lines. Defendant railroads claim CW employees

are not represented by a labor organization and perform

work at lower labor costs than Southern employees.

b. The VIP Trackage Rights Transaction

Southern, N&W and the Virginia Port Authority are

parties to an agreement that provides for both carriers

to render rail service between the Virginia Island Port

8 CW’s rental “payments” to Southern for the line lease consist

primarily of CW’s assumption of Southern’s statutorily mandated

common carrier obligations to provide service over the line.

39a

(“VIP”) in Front Royal, Virginia and the Norfolk Inter-

national Terminals (“NIT”) in Norfolk, Virginia. In

reaching this agreement, NW negotiated new labor agree-

ments with the Brotherhood of Locomotive Engineers

(“BLE”) and the United Transportation Union (“UTU”’)

which represent the NW employees who man the trains

used to provide this service. In one of these agreements,

the parties agreed that N&W trains operating between

the VIP and NIT could be operated with only an engineer

and a conductor. This is in contrast to the predecessor

agreements which required an engineer, a conductor and

a brakeman. Finally, on March 14, 1989, Southern and

N&W filed a verifi.d notice with the ICC exercising an

intra-corporate class exemption from ICC review and

approval of their proposed trackage rights agreement per-

mitting N&W to operate its trains, with N&W crews, over

Southern tracks as part of the VIP-NIT contract service.

The plaintiff rail labor unions responded to these pro-

posed transactions in January 1988 by serving notices on

Southern, N&W and NS seeking to add so-called “succes-

sor provisions” to the then-existing collective bargaining

agreements. Specifically, the notices sought new terms

that would (i) provide compensation guarantees for pres-

ent employees; (ii) require economic protections for em-

ployees in the event of an intra-corporate lease of rail

property; and (iii) provide for the assumption of existing

collective bargaining agreements by any purchasers, les-

sees or operators of Southern, N&W or NS rail lines.

Plaintiffs commenced this action on August 4, 1989 al-

leging that defendants violated RLA obligations when they

implemented leases and other transactions after the unions

served defendants with the §$ 6 notices proposing to mod-

ify their labor agreements to require bargaining over such

transactions.

40a

Analysis

I. Minor Dispute

The well-settled, dispositive principle operative here is

that courts are without jurisdiction where, as here, the

controversy presented is properly categorized as a “minor

dispute” under the RLA. The “major’’—‘‘minor” dispute

dichotomy grew up in RLA jurisprudence as a means of

distinguishing between those disputes requiring arbitra-

tion and those requiring bargaining. Whether a dispute

is “major” or “minor” depends not on the dispute’s im-

portance, but rather on its relationship to existing collec-

tive bargaining agreements. Consolidated Rail Corp. v.

RLEA, 109 8.Ct. 2477, 2480-81 (1989) (“Conrail”) ;

Dement v. Richmond, Fredericksburg & Potomac R.R. Co.,

845 F.2d 451, 462 (4th Cir. 1988) (“Dement”). Major

disputes are those disputes concerning “rates of pay,

rules, or working conditions.” 45 U.S.C. § 156. The parties

to major disputes seek to create new contractual rights.

Such disputes, therefore, and [sic]! cannot be resolved

by reference to existing labor agreements. Conrail, 109

S.Ct. at 2480; Dement, 845 F.2d at 462. Thus, the RLA

contemplates that major disputes will be settled by the

parties through a mandatory, protracted process of nego-

tiation, mediation, voluntary arbitration, and conciliation,

during which the status quo must be maintained. If, ulti-

mately, the parties cannot agree, they are free to resort

to “the use of economic force,” i.e., strikes or self help.

Conrail, 109 S.Ct. at 2480.

Minor disputes, by contrast, grow out of “grievances

or out of the interpretation or app.ication of agreements

concerning rates of pay, rules, or working conditions.”

45 U.S.C. § 153. Parties to miner disputes seek vindica-

tion of existing contract rights. Such disputes “may be

conclusively resolved by interpreting” existing agreements.

Conrail, 109 S.Ct. at 2480. Minor disputes that cannot be

resolved by the prescribed labor agreement procedures

4la

must be referred for arbitration to the National Railway

Arbitration |sic] Board (““NRAB”’), or to a special board

of adjustment created by the carrier and the union.’ 45

U.S.C. $153 First (i), Second. Thus, arbitration of

minor disputes is compulsory and the boards’ jurisdiction

to resolve them is primary and exclusive. Conrail, 109

S.Ct. at 2480-81; Andrews v. Louisville & Nashville R.R.

Co., 406 U.S. 320, 322 (1972); Dement, 845 F.2d at 462.

Where, as here, the parties disagree as to the nature of

the dispute, it is the Ceurt’s role to determine if it is

“major” or “minor.” In so doing, the Court must apply

the Supreme Court’s Conrail test:

Where an employer asserts a contractual right to

take the contested action, the ensuing dispute is minor

if the action is arguably justified by the terms of the

parties’ collective bargaining agreement. Where, in

contrast, the employer’s claims are frivolous or obvi-

ously insubstantial, the dispute is major.

109 S.Ct. at 2482 (emphasis added). But reference to the

collective bargaining agreement is not limited to its ex-

press, written terms; implied terms may also be con-

sidered. Conrail, 109 S.Ct. at 2485 (finding minor dispute

solely on the ground that contested action was arguably

justified by “implied contractual terms, as interpreted in

light of past practice”); See also Air Line Pilots Ass’n

Int’l v. Eastern Atr Lines, Inc., 863 F.2d 891, 896 (D.C.

Cir. 1988) ‘court must consider express contract in light

of past practices), aff'd, 889 F.2d 291 (D.C. Cir. 1980) ;

RLEA v. Norfolk & Western Ry. Co., 833 F.2d 700, 705-

06 (7th Cir. 1987) (parties’ collective bargaining agree-

ment “includes both the specific terms set forth in the

written agreement and any well established practices that

® Unlike major disputes, minor disputes do not require that the

carrier maintain the status quo. Instead, the carrier may act on

its interpretation of existing agreements pending the adjustment

board’s decision. Conrail, 109 S.Ct. at 2481 and n. 5, 2484.

42a

constitute a ‘course of dealing’ between the carrier and

empioyees”’) .

Determination of a dispute’s major or minor character

does not require a court to choose among contract inter-

pretations. Conrail, 109 S.Ct. at 2489; Norfolk & Ports-

mouth Belt Line R.R. Co. v. Brotherhood of R.R. Train-

men Lodge No. 514, 248 F.2d 34, 43 (4th Cir.), cert.

denied, 355 U.S. 914 (1958). Indeed, it is not open to the

court to determine which party’s asserted contractual

interpretation is correct. The court must merely deter-

mine if the dispute is capable of resolution by reference to

the agreement, without regard to the substantive merits;

interpretation is the arbitrator’s role. Conrail, 109 S.Ct.

at 2489. This is a “relatively light burden” for the car-

rier to satisfy. Conrail, 109 S.Ct. at 2482. Once satisfied,

the court’s inquiry ends and the claim must be dismissed

for lack of subject matter jurisdiction. J/d., Kushto v.

Brotherhood of Ry., Airline and S.S. Clerks Freight

Handler, Exp. and Station Employees, 818 F.2d 290, 193

(4th Cir. 1987). This burden is satisfied here.

NW, Southern, Southern’s subsidiaries, and the plain-

tiff unions are parties to written labor agreements gov-

erning the rates of pay, rules, and working conditions of

union-represented NW and Southern employees. NS is a

party to a similar labor agreement with its TCU repre-

sented employees. In none of these agreements is there

any restriction on the right of the carrier to sell, lease,

abandon, or grant trackage rights over its rail lines.

Nor do the agreements obligate NS, NW, or Southern to

require that a purchaser or lessee of a rail line assume

the parties’ existing coliective bargaining agreements, or

hire the carriers’ employees. Rather, recognizing that a

earrier’s discontinuance of operations may cause jobs and

work assignments to be eliminated or reduced and em-

ployees to be reassigned to different positions, the agree-

ments include provisions, in various forms, explicitly re-

serving to NS, NW and Southern the flexibility to abolish

43a

jobs and furlough employees as a result of a sale, lease,

abandonment, or other disposition of a rail line.’® Thus,

10 Defendant railroads submitted excerpts of the force reduction

and furlough provisions from ninety labor agreements pertinent

to the challenged transactions. The provision excerpted from the

agreement between Southern and many of its subsidiaries and the

3rotherhood of Maintenance of Way Employees (“BMWE”’), effec-

tive July 1, 1986, is typical. Rule 36(b) and (c) of that agree-

ment states:

(b) When an employee is cut off in a force reduction, or

his position or assignment is abolished, or he is displaced, as

herein provided, qualifications being sufficient, he shall either

(1) displace any employee his junior employed in any seniority

rank in which he holds seniority in the same sub-department

and seniority district within thirty (30) days from the date

affected, or (2) file his name and address as provided in Rule

38 of this agreement re: Notice of Desire to Retain Seniority.

porary vacancy shall, upon his displacement therefrom, return

to position or assignment last held, if still in existence, unless

it is held by a senior employee who obtained the same in the

exercise of a displacement right; if such position or assign-

ment is so held by such senior employee, or is no longer in

existence, such displaced employee may exercise a displacement

right as provided in paragraph (b) hereof.

Another Southern agreement is similarly typical:

(a) When forces are reduced and/or positions are abolished,

at least five (5) working days advance notice shall be given

employees affected thereby, except as otherwise provided in

paragraphs (c) and (d) of this rule. An employee whose posi-

tion is abolished may exercise his seniority rights by displac-

ing a junior employee on a position for which he is qualified;

other emplovees affected may exercise their seniority rights

in the same manner. Except as otherwise provided in Rule

E-1(k), employees displaced, whose seniority rights and quali-

fications entitle them to regular positions, may assert such

rights within fifteen (15) days. Employees who do not pos-

sess sufficient seniority or qualifications to displace a junior

employee or who do not assert their displacement rights

within the prescribed time limit shall be considered as fur-

loughed; provided, however, employees in seniority districts

44a

NS, NW, and Southern may unilaterally abolish positions

and furlough employees subject only to the limited con-

straints prescribed in the agreements. These constraints

typically require that employees receive advance notice of

job abolishment "', and that furloughs occur in reverse

having extra boards covered by Rule E-6 will go to the extra

board.

(b) When forces are reduced, the position to be abolished

shall be the position or positions which are no longer needed;

-f there be two or more positions doing the same kind of work

paying different rates in the office where such abolishment is

to be effected, the position paying the lowest rate shall be

abolished. In reducing forces, where there are two employees

in the same office assigned to the same class of work, working

the same hours and receiving the same rate of pay and one of

the positions is to be abolished, it will be the position held by

the junior employee.

x * * *

(¢) Nothing in this rule shall affect or prevent the abolish-

ment of positions at any time, except as otherwise provided in

this rule.

Agreement between Southern and BRAC, effective May 1, 1978,

Rule B-14.

Yet another example is the agreement between NW and BMWE,

effective Julv 1, 1986. Rule 14(a) of the agreement provides that

“not Jess than five working days’ notice” will be given “before

force reductions are made,” and Rule 14(c) provides that “when

reducing force, seniority shall govern, first laying off junior em-

ployees of the same Class in the gang or at the point where

reduction is to be made.” Rule 14(b) provides that “When force

reductions are made, positions are abolished or displacements oc-

cur, employees affected” (with a specified exception) shall “exer-

cise their seniority” within ten days and “shall exhaust all senior-

ity rights before being considered furloughed . . . .”

11 See, e.g., NW and Brotherhood of Maintenance of Way Em-

ployees Agreement Rule 14(a) (effective July 1, 1986) (“not less

than five working davs’ notice” will be given “before force reduc-

tions are made”): Southern and Brotherhood of Railway, Airline

and SS Clerks (now TCU) Aarecment Rule B-14/a) (effective

Mav 1, 1973) (“when forces are reduced and/or positions are

abolished. at least five (5) working days advance notice shall be

given’).

45a

seniority order '*. The parties’ agreements generally con-

tain detailed procedures addressing the effect on, and

right of, employees when the carrier abolishes a job."

In addition, some employees are covered by agreements

that provide specific income guarantees or other property

protections against economic joss in the event of a dis-

placement or transfer.'' It is not significant that the re-

duction in force, furlough, and related agreement provi-

sions do not expressly note that they apply to line disposi-

tions. Those provisions are broadly worded and contain

no limiting language suggesting their inapplicability to

sales, leases, or other line dispositions.

The parties’ past practices support defendants’ con-

tention that employment issues stemming from spur line

abandonments, sales and leases do not require pre-trans-

action RLA bargaining, but instead are governed by the

furlough and reduction in force provisions in the parties’

collective bargaining agreements. The parties in the past

have consistently relied on these collective bargaining pro-

visions to govern in the case of such line dispositions.

Often over the past twenty years, Southern and NW have

ceased operations over marginal rail lines, by abandon-

ment, sale and lease, and concurrently abolished jobs,

2 See, eg. NW and Brotherhocd of Maintenance of Way Em-

ployees Agreement Rule 14/c), (effective July 1, 1986) (when

force reductions are made, positions are abolished or displacements

occur, employees affected” shall “exercise their seniority” within

ten days and “shall exhaust all seniority rights before being con-

sidered furloughed. . .’’)

13 See, e.g., supra note 10.

4 See, e.g.. NW & BRAC (now TCU) 88 1(¢), 3(d):

An April 7, 1965 Memorandum Agreement between NW and

BRAC (now TCU) recognizes the right of the carrier to effect

a force reduction in the event there is a decline in business (sec-

tion 1(c)) ( and to transfer of work throughout the merged sys-

tem. That agreement also gives the affected eniployee the option

to follow the work with moving benefits, exercise his seniority,

or receive a lump-sum separation allowance (section 3(d) ).

46a

furloughed, and reassigned employees without first nego-

tiating with the unions.’* Those line dispositions had a

ripple effect beyond the jobs directly affected as they

caused employees to exercise their seniority rights to bid

for other jobs. Yet the labor plaintiffs in these circum-

stances never claimed that RLA bargaining had to pre-

cede the line dispositions. Instead, the parties resolved

any line disposition employment issues by relying on the

collective bargaining agreement provisions governing fur-

loughs and reductions in force. This consistent past prac-

tice furnishes persuasive support for defendants’ claim

15The record reflects that on more than ninety occasions since

1970, Southern and its subsidiaries have abandoned or discontinued

service over 1,500 miles of rail lines without bargaining under the

RLA. Similarly, the record further reflects that since 1973, NW

has discontinued or abandoned rail service over 1,200 miles of rail

lines without first bargaining under the RLA. In all of these

instances the parties apparently relied on labor agreements to

resolve any employment issues growing out of the abandonments.

This pattern of acquiescence is not limited to line abandonments.

it exists in the case of sales and leases as well. On at least three

occasions since 1984, NW or Southern, without prior RLA negotia-

tions, coupled line abandonment with an immediate line sale to

either an affiliated line or an unaffiliated third party for continued

operations. Although the new rail operator operated the line with

its own employees and pursuant to its own work arrangements,

the labor piaintiffs never contested the transactions or the absence

of pre-transaction RLA bargaining.

The record reflects a number of other, similar examples. On a

number of occasions in the past, Southern and its subsidiaries,

without RLA negotiations with their unions, have reduced their

operations by selling or leasing marginal or unprofitable rail lines

to other companies under the TSL program. NW has sold or leased

such lines on at least seven occasions. In these instances, as on

other occasions, the purchaser or lessee has operated the line with

its own employees and under its own work arrangements. None of

these carriers assumed Southern’s or NW’s labor agreements. And

again, the labor plaintiffs did not ¢until now) contest any of these

transactions and insist on pre-transaction RLA bargaining. Em-

ployee disputes arising from these transactions were apparently

resolved on the basis of existing collective bargaining agreements.

47a ~

that the collective bargaining agreement provisions are

sufficiently broad to cover the employment issues spawned

by the line transactions in issue. And importantly, as

noted above, the Court need not hold conclusively that

defendants’ proposed interpretation of the agreements is

correct. Rather, the Court need only find, as it does, that

defendants’ suggested interpretation is at least arguably

correct.

Ample case law supports this conclusion. Courts in the

Second, Third and Seventh Circuits have found essentially

identical disputes to be “minor,” based on the parties’

collective bargaining agreement provisions and their past

practices. Thus, in General Comm. of Adjustment,

United Transp. Union Western Maryland Ry. Co. v. CSX

R.R. Co., 893 F.2d 584 (3d. Cir. 1990) (“UTU v. CSX”’),

a union filed an action challenging the railroad’s right to

sell a rail line without first bargaining under the RLA

over a union § 6 notice addressing line sales. The Third

Circuit held the action presented a “minor dispute” over

which federal courts had no subject matter jurisdiction.

The sole remedy, according to the court, was arbitration

pursuant to RLA § 3, 45 U.S.C. § 153. In reaching these

conclusions, the court relied on the reduction in force and

furlough provisions in the existing agreements and on a

pattern of past practice of applying these provisions in

three line sales and twenty-six abandonments.'® To the

16 The similarity between the instant case and UTU v. CSX is

vividly illustrated by the Third Circuit’s comments concerning the

parties’ past practices and the furlough and reduction in force pro-

visions in their collective bargaining agreements. With respect to

the agreement provisions, the court noted:

The reduction in force and furlough provisions in the agree-

ments allowed the Railroad to unilaterally abolish job assign-

ments after giving notice. They also addressed the rights that

Union emplovefs had when jobs>were abolished-—namely, the

right to bid off other assignments and “bump” other employees

on the basis of seniority and to receive certain benefits if fur-

48a

same effect are CSX Transp., Inc. v. United Transp.

Union, 879 F.2d 990 (2d Cir. 1989), cert. denied, 110

S.Ct. 720 (1990) (“CSXT v. UTU”) and Chicago &

Northwestern Transp. Co. v. RLEA, 855 F.2d 1277 (7th

Cir.), cert. denied, 109 S.Ct. 493 (1988). See also Atchi-

son, Topeka & Santa Fe Ry. v. RLEA. No. 87 C 9848

(N.D. Ill. October 26, 1988) (challenge to line sale held

to he minor dispute in light of force reduction provisions

and past practice of engaging in line sales and abandon-

ments and concurrently abolishing jobs); Accord Maine

Central R.R. v. United Transp. Union, 787 F.2d 780, 783

(1st Cir.) (in light of past practice, challenge to car-

rier’s right to lease a line presents a minor dispute), cert.

denied, 479 U.S. 848 (1986). Only the Eighth Cireuit in

RLEA v. Chicago & Northwestern Transp. Co., 890 F.2d

1024 (1989), petition for cert. filed March 29, 1990, is to

the contrary.'’ But this case is neither apposite nor per-

suasive for, as the dissent notes, the court there was

presented with an inadequate record on the parties’ labor

agreements and their past practices in connection with

various line dispositions. See 890 F.2d at 1027. By con-

trast, the records in the UTU v. CSX, CSXT v. UTU,

and Chicago & Northwestern are more fully developed and

loughed. The agreements do not limit the reduction in force

and furlough provisions to situations that do not involve sales.

893 F.2d at 592. And with respect to the past pattern of acquies-

cence, the court noted:

The Railroad has disposed of rail lines on numerous occasions,

leading to the abolishment of many job assignments. Indeed,

it has sold segments of the Western Maryland lines on three

other occasions since 1983. While labor protective conditions

were imposed in two of these eartier sales, no claims were then

made by the Union that the Railroad was acting outside the

scope of the existing agreement, even though Union employees

were obviously affected by the sales.

Id.

17 Worth noting, however, is that the Eighth Circuit held the

union could not prevent the carrier’s planned line sale. See 890

F.2d at 1026. In this respect, that decision is consistent with the

result reached here.

49a

confirm the essential! similarity of those cases to the case

at bar.

II. § 6 Notices

In 1988 and 1989, prior to instituting this action, labor

defendants filed RLA § 6 notices calling upon defendants

to bargain with the unions concerning the addition of

successor provisions to the parties’ labor agreements."*

Plaintiffs, in Court III, claim these notices trump the

“minor” dispute analysis, create a major dispute and re-

quire maintenance of the status quo during bargaining.

This claim is unconvincing; it runs counter to principle

and precedent. On principle, acceptance of this claim

would effectively eliminate the major-minor dispute di-

chotomy long used under the RLA. Substantial precedent

recognizes that this would be an inappropriate result.

Courts have consistently rejected claims similar to plain-

tiffs’, finding instead that minor disputes are not trans-

formed into major disputes by the filing of RLA § 6 no-

tices. As the Second Circuit noted, when a dispute aris-

ing from a line sale is minor, “the service of Section 6

notices by the appellant unions would have no transform-

ing or alchemizing effect upon that [minor dispute] situ-

ation.” CSXT v. UTU, 879 F.2d at 1000. In the Third

Circuit’s word, “[t]he Union’s § 6 notice does not serve to

short-circuit the arbitration process Congress specifically

designed to resolve minor disputes.” UTU v. CSX, 893

F.2d at 594. See also Air Line Pilots Ass’n v. Eastern

Air Lines, Inc., 863 F.2d 891, 900 (“a rule that allows

a party to characterize all disputes as ‘major’ through a

ISRLA $6, 45 U.S.C. § 156, establishes the procedure for com-

mencing and engaging in bargaining over any “intended change in

agreements affecting rates of pay, rules, or working conditions.”

It iurther provides that after notice of an ‘ tended change has

been given, “rates of pay. rules, or workiy conditions shall not

be altered by the carrier until the controversy has been finally

acted upon... .” This provision is commonly referred to as the

“status quo obligation.”

50a

unilateral actions such as serving § 6 notices on the other

party is unwise and contrary to the two-track proce-

dure of the RLA”’); see also Chicago & North Western

Transp. Co. v. RLEA, 855 F.2d 1277 (7th Cir.), cert.

denied, 109 S. Ct. 493 (1988); RLEA v. Boston & Maine

Corp., 808 F.2d 150, 156 (1st Cir. 1986), cert. denied,

484 U.S. 830 (1987); Rutland Ry. Corp. v. Brotherhood

of Locomotive Eng’rs, 307 F.2d 21, 34-36 (2d Cir.), cert.

denied, 372 U.S. 954 (1963); Hilbert v. Pennsylvania

R.R. Co., 290 F.2d 881, 885 (7th Cir.), cert. denied, 368

U.S. 900 (1961). In short, the labor plaintiffs’ $ 6 no-

tices do not trump the major-minor analysis; they do not

convert this minor dispute into a major one. The notices

are effective only as te an “intended change in agree-

ments.” '” If, as the Court has concluded here, the con-

troversy is arguably covered by the existing agreements,

then the dispute is “minor,” from which it follows that

the Court has no subject matter jurisdiction over the dis-

pute, and the parties are relegated to their RLA arbitra-

tion remedy.

Even so, the labor plaintiffs claim that the service of

their § 6 notices subjects defendants to the RLA’s status

quo obligation. Settled authority scuttle this claim, too.

Conrail v. RLEA, 109 §S. Ct. 2477, 2481 n.5 (1989) estab-

lishes that a carrier is under no obligation to maintain

the status quo in a minor dispute. In such disputes, a

carrier may continue to act on its interpretation of the

labor agreement pending a resolution by an adjustment

board under the RLA. Conrail, 109 S. Ct. at 2484: see

also UTU v. CSX, 893 F.2d at 594 (“Because a minor

dispute is involved, § 6’s bargaining and status quo re-

qiurements are inapplicable and the arguments made by

the Union on the nature of these requirements are not

19 Thus, the defendant railroads may well have an obligation to

bargain with the unions as to the inclusion of such provisions in

future agreements. Cf. Pittshurg & Lalee Erie R.R. v. RLEA, 109

S.Ct. 2584, 2593-97 (1989) (“P&LE v. RLEA’”). That issue is not

presented here.

5la

pertinent”); Air Line Pilots Ass’n Int'l v. Eastern Air

Lines, Inc., 869 F.2d 1518, 1520 (Q.C. Cir. 1989) (trial

court “had no jurisdiction to issue a status quo injunc-

tion” in minor dispute); Chicago & North Western

Transp. Co. v. RLEA, 855 F.2d at 1287-88 (same) ;

Burlington Northern R.R. v. UTU, 862 F.2d 1266, 1277

(7th Cir. 1988) (in minor dispute, carrier may “con-

tinue to apply its interpretation of the agreement” and

“Implement its view of the issue’); International Ass’n

of Machinists and Aerospace Workers, Dist. Lodge No.

19 v. Soo Line R.R. Co., 850 F.2d 368, 376 (8th Cir.)

(en banc), cert. denied, 109 S. Ct. 1118 (1989) ; Division

No. 1, Bhd. of Locomotive Engrs v. Consolidated Rail

Corp., 844 F.2d 1218, 1221 (6th Cir. 1988); UTU v.

Penn Central Transp. Co., 505 F.2d 542, 545 (3d Cir.

1974) (per curiam).

Next, labor plaintiffs argue that even if their § 6 no-

tices did not create a status quo obligation, the various

line transactions in issue resulted or will result in loss of

jobs by employees thereby causing a “change in agree-

ments affecting rates of pay, rules or working condi-

tions” under RLA § 6. This, plaintiffs claim, would then

give rise to a duty on the part of defendants to give the

unions notice of the changes and then to maintain the

status quo while bargaining over the changes. Again, es-

tablished authority contradicts this claim. Pittsburg [sic]

& Lake Erie R.R. v. RLEA (“P&LE v. RLEA’’), 109 8S.

Ct. 2584 (1989) makes clear that a carrier intending to

dispose of all its assets incurs no § 6 duty to give notice

and bargain over its decision. /d. at 2592-93. In that case,

the Supreme Court rejected the union’s claim that “loss

of jobs by possibly two-thirds of the employees” would

trigger the carrier’s RLA § 6 notice and status quo obli-

gations. Id. at 2595.°° That the transaction in P&LE »v.

“0 The Supreme Court in P&eLE v. RLEA also held that a car-

rier disposing of its railroad operating assets pursuant to 49

U.S.C. § 10901 was required to engage in “effects bargaining” in

52a

RLEA was a sale of all the carrier’s assets is not a sig-

nificant distinction from the instant case, which involves

dispositions of only portions of a carrier’s assets. No

reason in principle and nothing in the P&LE decision

requires that partial asset dispositions be treated differ-

ently from complete asset sales for purposes of the RLA

§6 notice and status quo obligations. Thus, P&LE v.

RLEA teaches that job losses, if any, resulting from the

transactions here in issue do not trigger defendant’s RLA

§ 6 notice and status quo obligations.

In sum, this Court’s minor dispute holding and its con-

clusion that defendants have no RLA status quo obliga-

tion dispose of the Amended Complaint and _ plaintiff’s

request for injunctive relief. It is, therefore, unneces-

sary to reach the merits of labor plaintiffs’ other RLA

claims *! or defendants’ statute of limitations and waiver

defenses.** But still remaining for consideration is de-

response to union §6 notices. Significantly, the Court also held

that in the absence of existing agreement provisions prohibiting

or otherwise limiting the railroad’s line disposition, the carrier

was under no status quo obligation. See also RLEA v. Chicago &

Northwestern Transp. Co., 890 F.2d 1024 (8th Cir. 1989). P&LE

is no authority for requiring even “effects bargaining” in the

majority of the transactions encompassed in plaintiffs’ Count III.

Virtually all of the transactions have been carried out under 49

U.S.C. § 11343 rather than 49 U.S.C. § 10901. In transactions

carried out under § 11343, the ICC imposes its statutorily man-

dated employee protective conditions, which provide an exclusive

mechanism for negotiations concerning the implementation and

effects of transactions. In these instances, the RLA major dispute

bargaining requirements do not apply. Even in the few transac-

tions where defendants may have an “effects bargaining” obliga-

tion, that obligation does not subject the transactions to the status

quo obligation. See P&LE v. RLEA, 109 S. Ct. at 2597.

21In Count II of the Amended Complaint, labor plaintiffs con-

tended that defendants violated their RLA obligations under §§ 2

Third and Ninth when they consummated the lease and trackage

rights transactions.

22 Defendants contended that plaintiffs’ claims are governed and

barred by the six month statute of limitations contained in § 10(b)

| 58a

fendants’ claim for injunctive relief against threatened

self-help by the labor plaintiffs. Also remaining for con-

sideration, as an alternative basis for summary judg-

ment as to certain of the transactions in issue, is defend-

ants’ contention that the ICC has excluive jurisdiction

over those transactions.

Ill. ICC Exclusive Jurisdiction

Many of the line transactions in issue were authorized

by the ICC pursuant to 49 U.S.C. § 11343.*° Specifically,

these transactions include (i) all the TSL leases, except

those allowed under 49 U.S.C. § 10901, (ii) the CW

lease and (iii) the VIP trackage rights transaction. In

each of the transactions authorized under § 11343, the

ICC has imposed its standard employee protection con-

ditions. Pursuant to these conditions, the defendant car-

riers have given notice to their employees and, when re-

quired by the conditions, the defendant carriers have

of the National Labor Relations Act, 29 U.S.C. §160(b). See

Triplett v. Brotherhood of Railway, Airline & S.S. Clerks, 801 F.2d

700, 702 (4th Cir. 1986) (§10(b) limitations period applied to

unfair representation claims under the RLA). Defendants also

contended that certain of labor plaintiffs, specifically the BLE and

the UTU, have waived any claims they may have had regarding

the VIP trackage rights transaction.

23 This provision states, in pertinent part:

(a) The following transactions involving carriers providing

transportation subject to the jurisdiction of the Interstate Com-

merce Commission under subchapter I (except a pipeline carrier),

II, or III of chapter 105 of this title may be carried out only with

the appreval and authorization of the Commission:

* * * ¥

(2) a purchase, lease, or contract to operate property of

another carrier by any number of carriers.

* * * *

(6) acquisition by a rail carrier of trackage rights over,

or joint ownership in or joint use of, a railroad line (and

terminals incidental to it) owned or operated by another

rail carrier,

54a

negotiated implementing agreements with the pertinent

unions. Under these circumstances, defendants contend,

the RLA is displaced and exclusive jurisdiction over

these transactions and their effects on employees is vested

in the ICC. This contention is valid.

In the ease of § 11343 authorized transactions,** Con-

gress has provided, in 49 U.S.C. § 11347, an exclusive

mechanism designed to govern the rights affected em-

ployees [sic]. This mechanism permits the parties to nego-

tiate a fair arrangement for employees affected by covered

transactions, but requires carriers implementing those

transactions “to provide a fair arrangement at least as

protective of the interest of employees who are affected

by the transaction as the terms imposed under this Sec-

tion before February 5, 1976 and the terms established

under section 405 of the Rail Passenger Service Act (45

U.S.C. 565).” Routinely, and in the transactions at bar,

the ICC has imposed so-called Mendocino Coast coast con-

ditions ** which have been held to satisfy § 11847 require-

ment for protective conditions. This mechanism governs

exclusively the rights of employees in the covered trans-

actions; it displaces RLA-based rights in this context.

Settled authority confirms this result. The Eighth Cir-

cuit so ruled in Brotherhood of Locomotive Eng’rs v.

Chicago & North Western Ry. Co., 314 F.2d 424, cert.

denied, 375 U.S. 819 (1963). In reaching its conclusion,

that court recognized that application of the RLA and its

purposely drawn out procedures would allow unions effec-

tively to block approved transactions.** In this context, as

*4The ICC’s exercise of its § 11343 power may be in the form

of a decision approving a transaction or a decision allowing a

transaction to proceed pursuant to 49 U.S.C. §$ 10505 under an

exemption from the provision’s prior approval requirement.

25 See supra n. 7 and accompanying text.

°6 The RLA major dispute procedures are “purposely long and

drawn out,” Brotherhood of Ry. & S.S. Clerks v. Florida East

Coast Ry. Co., 384 U.S. 238, 246 (1966), and exhaustion of them

| |

55a

the Eighth Circuit recognized, invocation of the RLA

“would threaten to prevent many consolidations” in direct

contravention of congressional intent. 314 F.2d at 430-31.

Other courts have consistently followed the Eighth Cir-

cuit’s reasoning and result. See, e.g., Brotherhood of Loco-

motive Eng’rs v. Boston & Maine Corp., 788 F.2d 794,

800-01 (1st Cir.) (1CC authorization of transactions

under § 10505 precludes RLA remedies that would cir-

cumvent protective conditions), cert. denied, 479 U.S. 829

(1986); Burlington Northern, Inc. v. American Ry. Su-

pervisors Ass’n, 503 F.2d 58, 62-63 (7th Cir. 1974) (per

curiam) (employee protective agreement adopted by ICC

as condition on its approval of merger was “not incon-

sistent with any provision of the [RLA], and if it were,

its provisions would be controlling’), cert. denied, 421

U.S. 975 (1975) ; Nemitz v. Norfolk & Western Ry. Co.,

436 F.2d 841, 844-46 (6th Cir.) (where ICC adopts the

terms of an employee protective agreement as conditions

on its approval of a consolidation, the parties’ rights

under the protective conditions flow from the ICC’s order,

not from the original agreement, and the parties may not

invoke RLA remedies for the purpose of determining their

| rights, which arise under the ICA), aff'd on other

| grounds, 404 U.S. 37 (1971). See Brotherhood of Loco-

motive Eng’rs v. ICC, 808 F.2d 1570, 1578-79 and n.75

(D.C. Cir. 1987) (arbitrator acting under ICC-imposed

protective conditions is empowered to decide which labor

agreements will apply to employees being transferred

from one railrcad to another). See also UTU v. Norfolk

& Western Ry. Co., 332 F. Supp. 1170, 1174-75 (N.D.

is “an almost interminable process,” Detroit & Toledo Shore Line

R.R. Co. v. UTU, 396 U.S. 142, 155 (1969). In the end, if the

paries cannot agree on terms “no authority is empowered to decide

the dispute,” Elgin, Joilet & Eastern Ry. Co. v. Burley, 325 U.S.

711, 725 (1945), and the parties are free to resort to self-help.

Id. at 724.

56a

Ohio 1971) (arbitration requirement of ICC-approved

job protection agreement supplants RLA remedies) .*"

The ICC has also held that its § 11347 protective con-

ditions, not the RLA, control the rights of affected em-

ployees in § 11343 transactions. See Southern Ry.—Con-

trol—Central of Georgia Ry., 331 I.C.C. 151 (1967);

Denver & Rio Grande Western R.R.—Trackage Rights—

Mo. Pac. R.R., Finance Docket No. 30,000 (served Oc-

tober 25, 1983), appeal disiuw’ssed sub nom. I1.C.C. v.

Brotherhood of Locomotive Eny’i's, 482 U.S. 270 (1987) ;

Maine Central R.R., et al—Exemption, Finance Docket

No. 30532 (Served September 13, 1985), aff'd mem. sub

nom. RLEA v, ICC, 812 F.2d 1443 (D.C. Cir. 1987).

Brotherhood of Ry. Carmen v. 1.C.C. (“Carmen”), 880

F.2d 562 (D.C. Cir. 1989), cert. granted sub nom. Norfolk

and Western Ry. Co. v. American Train Dispatchers

Ass’n, 110 S.Ct. 1522 (1990) does not contradict this line

of authority. At issue there were two ICC decisions re-

viewing arbitrator awards made under protective condi-

tions imposed in two ICC-approved railroad consolidations.

In both cases, the ICC had ruled (i) that the consolida-

tions were subject to 49 U.S.C. § 11341(a) as well as to

3 11347 (ii) that arbitrators could override labor agree-

ments as necessary in connection with the conditions and

(iii) that the statutory protective conditions prevail over

inconsistent RLA-based claims, including claims based on

“7 Courts have reached the same result in cases arising in the

airline industry, which is also generally subject to the RLA. See,

e.g., Int'l Ass’n of Machinists and Aerospace Workers v. North-

east Airlines, Inc., 536 F.2d 975, 977 (1st Cir.), cert. denied, 429

U.S. 961 (1976); Int’l Ass'n of Machinists and Aerospace Workers

v. Northeast Airlines, Inc., 473 F.2d 549, 559-60 (1st Cir.),

cert. denied, 409 U.S. 845 (1972); American Airlines, Inc. v. CAR,

145 F.2d 891, 896-97 (2d Cir.) (Friendly, J.), cert. denied, 404

U.S. 1015 (1972); Kent v. CAB, 204 F.2d 263, 266 (2d Cir.)

(“la] private [labor] contract must yield to the paramount power

of the [CAB] to perform its duties under the statute creating it

to- approve mergers ... .”), cert. denied, 346 U.S. 826 (1953).

57a

labor agreements. The D.C. Circuit held the § 11341 (a)

“does not grant the ICC its claimed power to override

provisions” of a labor agreement. 880 F.2d at 574. It

reversed on this point, but specifically declined to address

the ICC’s conclusion that by virtue of § 11347, the arbi-

tration procedure contained in the protective conditions

displaces the RLA. 880 F.2d at 573. Thus, Carmen, is

distinguishable from the settled line of authority cited

above. The principal focus of Carmen is the ICC’s

$ 11{1]34(a) authority to modify or override labor agree-

ments. Section 1134[1](a) [sic] is not central here. In

the transactions at bar, the ICC has imposed employee

protective conditiors pursuant to § 11347, which is made

applicable in exemption cases, like those at bar, by 49

U.S.C. § 10505(g) (2). Carmen did not reach the § 11347

issue.

In summary, certain of the challenged transactions

have proceeded by virtue of the ICC’s § 11343 authority,

with the result that in these instances, the ICC has im-

posed § 11347 employee protective conditions. These

transactions are immune from labor plaintiff's RLA

claims. The ICC has exclusiv

This text is long and has been trimmed here. Open the source document for the complete record.

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.